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October 29
Documenting an Applicant's Intent to be a Joint Applicant;
David Dickinson

November 4
Issues with Deceased Customers;
Mary Beth Guard and John Burnett

November 5
Vault Burglaries, Floods, Fires & Other Disasters;
Dave McGuinn

November 6
MLO v LO - Who Has to Do What?;
Jack Holzknecht and Mary Beth Guard

November 13
Domestic Violence & Workplace Violence: There Is A Link;
Shelly Collins and Dana Turner

November 18
Understanding USPAP and Regulatory Guidelines for Appraisal and Evaluation Compliance Reviews;
Eric Collinsworth



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#1387670 - 05/07/10 11:41 AM Tolerance cure on HUD-1A
sewanee, CRCM Offline
Gold Star

Registered: 12/07/06
Posts: 406
Loc: TN
HUD's FAQs have given detailed information on how to list a tolerance cure on a HUD-1 by showing a credit to the customer on Line 204. Does anybody know how to do the same on a HUD-1A? None of the lines in any section allow for a credit to the borrower. I e-mailed the direct question to HUD, and their response was to direct me to the instructions on completing the HUD-1A. Those instructions are silent on the subject.

Is it acceptable to show the tolerance cure as a P.O.C.(L) on the line for the item?

I'm having to re-issue a HUD after closing.
_________________________
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Keep Calm and Carry On
CRCM

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RESPA
#1387719 - 05/07/10 12:14 PM Re: Tolerance cure on HUD-1A [Re: sewanee, CRCM]
Dan Persfull Offline
10K Club

Registered: 08/28/02
Posts: 40993
Loc: Bloomington, IN
If the out of tolerance was due to one line item and you are applying the cure to that line item then yes you can do as you describe.

However, if you are out of tolerance due to more than one line item where you have to apply the cure to the overall 10% section then you will have to transfer the information to a HUD 1 and issue the credit on page 1 in the 200 series.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1387733 - 05/07/10 12:24 PM Re: Tolerance cure on HUD-1A [Re: sewanee, CRCM]
Mainiac Offline
100 Club

Registered: 11/25/05
Posts: 147
If I could post a related question - can we cure a tolerance issue by applying a principal reduction to the borrower's loan balance?

There is a disclussion in the FAQ for GFE-Block 2 (Item #4) that addresses correction of a Block 2 credit that is reduced at closing because the third-party fees are lower than estimated. If that occurs, banks are responsible for giving the cusotmer the full amount of the credit, even if more than the invoices. that discussion allows the principal reduction to cure, but I don't see any other reference in the tolerance cure section of the April 2, 2010 Q & A on pages 41 - 43. Does the principal reduction cure rule apply to any tolerance exceptions?

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#1388101 - 05/07/10 05:08 PM Re: Tolerance cure on HUD-1A [Re: Dan Persfull]
sewanee, CRCM Offline
Gold Star

Registered: 12/07/06
Posts: 406
Loc: TN
Thanks for the response. This has been my contention, but I've received backlash from the lenders, saying "it can't be done".

Of course, we all know better.
_________________________
____________________________________
Keep Calm and Carry On
CRCM

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#1388161 - 05/07/10 07:41 PM Re: Tolerance cure on HUD-1A [Re: sewanee, CRCM]
David Dickinson Online
10K Club

Registered: 11/28/00
Posts: 14089
Loc: Central City, NE
There are several times when you won't be able to use a HUD-1A even though there is no title transfer. Curing is one of them.
_________________________
David Dickinson
http://www.bankerscompliance.com

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#1388162 - 05/07/10 07:45 PM Re: Tolerance cure on HUD-1A [Re: Mainiac]
David Dickinson Online
10K Club

Registered: 11/28/00
Posts: 14089
Loc: Central City, NE
Quote:
There is a discussion in the FAQ for GFE-Block 2 (Item #4) that addresses correction of a Block 2 credit that is reduced at closing because the third-party fees are lower than estimated. If that occurs, banks are responsible for giving the customer the full amount of the credit, even if more than the invoices. that discussion allows the principal reduction to cure, but I don't see any other reference in the tolerance cure section of the April 2, 2010 Q & A on pages 41 - 43. Does the principal reduction cure rule apply to any tolerance exceptions?

I don't believe so. This FAQ is addressing reducing the credit in Block 2, not curing.
_________________________
David Dickinson
http://www.bankerscompliance.com

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