We recently received a couple of questions regarding the Affiliated Business Arrangement Disclosure. The first centered on whether the disclosure is required for Home Equity Lines of Credit (HELOCs), and the second on whether the disclosure must be provided when no affiliate referral will be made.
It’s important to remember that the Affiliated Business Arrangement Disclosure is a requirement of RESPA. So, while HELOCs are exempt from the TILA-RESPA Integrated Disclosures (TRID) requirements found in Regulation Z (Truth in Lending), that exemption has no bearing on whether the Affiliated Business Arrangement Disclosure is required. In other words, the fact a HELOC does not need a Loan Estimate or Closing Disclosure does not dictate whether an Affiliated Business Arrangement Disclosure is needed. The Affiliated Business Arrangement Disclosure is triggered by a referral to an affiliated settlement service provider.
The disclosure is triggered by the act of making the referral and is generally required to be provided no later than the time the referral occurs. If no referral is made to an affiliated settlement service provider, the disclosure is not required. Keep in mind that there is nothing in RESPA that prohibits over-disclosure. We have many clients who opt to give the Affiliated Business Arrangement Disclosure in all cases as a way to help simplify the process for their lenders.
If you want to learn more about the Affiliated Business Arrangement Disclosure as well as other requirements applicable to mortgage loans, be sure to check out “The Mortgage Life Cycle”. This five-part webinar series (10 hours of training) is a chronological journey from pre-application to post-closing and everything in between.
Published
2025/07/04
