Has anyone heard of an examiner finding, or heard of a legal case that might help me out??

Business transactions are exempt from Reg Z. Specifically included in the definition are non-owner occupied rental properties. If documents are provided that are unnecessary, but they have an error, could that be a citation, or liability?

Specifically, if a lender provides a final TiL to an exempt transaction, and the TiL is out of tolerance, does anything need to be done? Would reimbursement or redisclosure even be required?

Thanks

If the transaction is exempt from TIL, then there can't be a TIL violation. Therefore, IMO you have no liability under TIL even if you provide TIL disclosures.

There is a Q & A in the Interagency Policy Statement on Restitution (I found it in the OCC's Handbook on Reg. Z) that has the following question and answer:

Q: If APR or finance charge disclosures not required by Regulation Z have been made, will reimbursement be required when such optional disclosures are understated?

A: No. However, errors in disclosures not required by Regulation Z for a particular transaction are violations of either 12 CFR 226.5(a)(1) or 12 CFR 226.17(a)(1), both of which require that credit disclosures be made clearly and conspicuously.

I have previously interpreted this to mean that if we give disclosures when they are not required by Reg. Z, they still need to clearly and conspicuously reflect the terms of the credit agreement. However, even if the errors are out of tolerance, reimbursememt would not be required. It appears that there would still be an error - just not a reimbursable one.

Errors in TIL where no TIL was required may also earn you closer scrutiny by an examiner of your loans that are subject to Z. (They want to make sure your system or process isn't flawed).

LL, it was a loan made to an individual who has multiple rental properties, including the one being refinanced. The property was claimed as a rental on the 1003 and reported as income producing on the tax returns schedule E. The blip occured when the mortgage insurance factor was changed from OO to investment, however the TiL was not redone.

Juliad, thanks for the reference. That question hit the point exactly - redisclosure not reimbursement.

Now, another 100+ page book to memorize