I don't understand how you can be stuck for a charge that isn't incurred. If I do list OTI on the GFE and it isn't purchased....is it showing up on the HUD-1? To me, i would be stuck if i failed to list it on the GFE, and the borrower wants to and does purchase it. Then it would be a cure situation. We're a title exam state, so it's not that it's seller paid or borrower paid...it isn't, in most cases, being purchased at all. (Again, i understand it still needs to be quoted, thus my statement about being a technical violation if omitted.) If i don't list it and it isn't purchased...how is that a problem? 10% tolerance...ok....i have the fee i showed on my GFE (nothing) and the actual cost incurred on the HUD-1 (nothing). Where's the cure? I may be wrong; if so, someone please provide me guidance on where it says this in the regulation.

In short, there is nothing we can do to cure. Note the price of the homeowners insurance on the HUD1 and list $0 for the OTI since they aren't going to buy it. The OTI is still going to be a violation since it wasn't noted. Is that correct?

Thanks

I stick with my first answer til proven otherwise jungle. Yes, i think it's a violation to not list OTI on a purchase transaction, but if the customer doesn't purchase it, to me there's nothing to cure.

I agree...it's a technical error, but won't skew your tolerance as zero and zero will wash out!

Omitting the OTI from the GFE on a purchase transaction would be a Sec 5 violation under the new rules IMO and for this particular violation there is no cure. You can't issue a revised GFE because there is no chaged circumstance.

If you disclose $0.00 on the GFE and $0.00 on the HUD then they wash each other out the same as disclosing $500 and $500 so there would be no 10% tolerance to cure, unless of course all the other charges exceeded the 10% of their totals.

Since there is no tolerance regarding the homeowners insurance, we should be ok, right? Just making sure.

Thanks

As far as refunding any money to the customer, yes, you should be ok. There's an unlimited tolerance for Block 11.