What is closing vs. consummation?
The rules introduce a new term into real estate transactions. The term is consummation and is defined in the rule as the day the borrower becomes legally obligated under the loan. This will generally be the date of signing.
Consummation may be different than the closing date as defined in the purchase agreement where the buyerbecomes contractually obligated to a seller on a real estate
transaction. In most cases these two dates are not the same and clearly have very different meanings.
The reason it is important to understand the difference between the date of consummation and the closing date is because the Closing Disclosure must be delivered at
least three business days prior to the consummation of the transaction. If the Closing Disclosure is hand delivered a Waiting Period commences. If the Closing Disclosure is
delivered by mail, courier or fax, a Delivery Period of three business days precedes the Waiting Period.