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#1992268 - 01/29/15 07:05 PM Tolerance cure Reduce APR
ADN Offline
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We have a situation where we disclosed an APR fee incorrectly and are required to give a tolerance cure. Can we use the tolerance cure amount to reduce the finance charge?

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Lending Compliance
#1992322 - 01/29/15 08:52 PM Re: Tolerance cure Reduce APR ADN
Richard Insley Offline
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Richard Insley
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Toano, VA
What, exactly, is a "tolerance cure?"
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#1992359 - 01/29/15 10:09 PM Re: Tolerance cure Reduce APR Richard Insley
ADN Offline
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A cure on the HUD comparison chart for being over the 10% limit. We did not disclose a closing fee on the GFE(when producing the GFE the title company said they would only charge 1 closing fee for the 1st and 2nd mortgage loans that were closing at the same time) The day of the closing the title company prepared the HUD for the bank and they charged a closing fee for both loans. Thus we were out of tolerance on our comparison chart on the HUD and our TIL was underdisclosed for our 2nd mtg loan.
Last edited by ADN; 01/29/15 10:09 PM.
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#1992382 - 01/30/15 01:35 AM Re: Tolerance cure Reduce APR ADN
Rocky P Offline
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Florida
There are 2 different tolerances you may be talking about. One is on the GFE/HUDS-1 comparison on page 3 of the HUD-1. That would depend on whether the fee was in the 10% tolerance field or 0% field.

There is also a different tolerance test for the truth in lending disclosure. The APR tolerance is .25% for variable rate loans and .125% for "fixed rate loans (payment amounts do not vary)"

Which might you be talking about?
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#1992400 - 01/30/15 07:10 AM Re: Tolerance cure Reduce APR ADN
Kathleen O. Blanchard Offline

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Kathleen O. Blanchard
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Or perhaps both are problematic.
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#1992405 - 01/30/15 12:54 PM Re: Tolerance cure Reduce APR ADN
Richard Insley Offline
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Richard Insley
Joined: Oct 2000
Posts: 10,097
Toano, VA
Originally Posted By: ADN
title company said they would only charge 1 closing fee...charged a closing fee for both loans.
If the original quote was in writing, this sounds like a breach of contract by the title company. You should demand a refund of the second closing fee and pass it along to the borrower.
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