A big question that I have been asked is “Does the CD, when it goes out, mean you’re good to go for closing? Are you’re clear to close?” and the answer to that, as much as I want to say yes, is a NO.
So, unfortunately, this TRID role that makes you send out a CD and then you’ve got to wait three days after the day that you send it out to be able to close. What lenders have done to be able to still close on time is the minute you have an appraisal you have the title, you have approval and insurances we’re allowed to send what we call a preliminary CD. That preliminary CD is sent out as soon as possible, as soon as we’ve got those four factors. That way by the time we get clear to close, we can schedule the closing right away and not have to wait three days.
So, if I send out the preliminary CD on Monday, the client has to sign that Monday because if they don’t sign it, the clock doesn’t start. Then, Tuesday is Day 1, Wednesday is Day 2, and Thursday is Day 3. I can close on the third day. So, if we send the CD out Monday and they sign, the earliest we can close is Thursday. However, the question “Does it mean we’re going to close for sure?”, No. If you have a broker or a loan officer telling you, “Oh yeah, we sent the CD”, trying to tell you that it’s a done deal… it is not.
You need a Clear to Close because potentially what could happen is they send the CD out Monday and they’re working on getting the Clear to Close Tuesday, Wednesday, to be ready for Thursday, and they can deny the loan for something that might pop up or a condition that wasn’t able to clear.
So if you get a CD to be sent out without a Clear to Close, it does not mean it’s a done deal. They still have to clear conditions to get a Clear to Close. Basically, a Clear to Close is the only thing that guarantees that you’re going to close. So that’s the way it works. If you’ve got more questions, we’d be happy to help you out.