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July 29
W-9, W-8BEN and W-8 BENE: IRS issues new forms and new rules;
Deborah Crawford

July 31
ACH Security Framework Rule - Small Rule, Big Implications;
Rayleen Pirnie

August 6
Part I
Flood Insurance: Requirements and Best Practices
A Two-Part Companion Webinar Series;
David Dickinson and Jerod Moyer

August 12
A to Z of Reg E;
Andy Zavoina

August 13
Part II
Flood Insurance: Requirements and Best Practices
A Two-Part Companion Webinar Series;
David Dickinson and Jerod Moyer



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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: 405
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: 40497
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: 405
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 Offline
10K Club

Registered: 11/28/00
Posts: 13799
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 Offline
10K Club

Registered: 11/28/00
Posts: 13799
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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