If you have an LOS system error is it allowable to make an exception on paying tolerance cures to borrowers?

I highly doubt it considering the inputs into the LOS are manual, and you should have a procedure in place to review and check any documents produced by the LOS prior to providing them to yuor borrower and executing them.

Definitely not. Human error, which even an LOS error is based on, is not a changed circumstance nor would it eleviate the bank's responsibilities to correct, ie: cure, the error.

we just discovered an error after a LOS enhancement. It was said that tolerance cures are forgiven for system errors. I am not ware of such an excpetion and wanted to be sure before I make a recommedation.

Never heard that tolerance cures are forgiven...ever under any circumstances. Way back in the first quarter of 2010 when RESPA first came out, some examiners were asked to be lenient while everyone got used to doing it the new way. System errors were not part of that request, that I recall. And it WAS just a request made by one government office to its examiners not something that governed them all.

Law...certain Reg Z tolerance errors fall under system error promptly corrected...not RESPA.

ETA: 45d An error in disclosure of the annual percentage rate or finance charge shall not, in itself, be considered a violation of this regulation if: (1) The error resulted from a corresponding error in a calculation tool used in good faith by the creditor; and (2) upon discovery of the error, the creditor promptly discontinues use of that calculation tool for disclosure purposes and notifies the Board in writing of the error in the calculation tool.

Thanks all - I bet the person mispoke and was referring to Reg Z not RESPA.

That's waht I'm thinking, too, Law.