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#2067398 - 03/03/16 07:35 PM Tolerance Cure Due to LE Rounding
RolTyde Offline
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Posts: 78
Anywhere but here
I can't believe I haven't run into this already and I haven't been able to find where this is addressed. On the LE we round our transfer tax to the nearest dollar, like nearly every other thing on the LE. Sometimes, of course, this means for the transfer tax, the LE reflects $85 when the fee is $85.43. This fee was correct so on the CD we showed the $85.43. We sell our loans on the secondary market and one of our lender's compliance is requiring us to cure for the $0.43. Is this correct?

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TRID - TILA/RESPA Integrated Disclosures Rule
#2067417 - 03/03/16 08:33 PM Re: Tolerance Cure Due to LE Rounding RolTyde
raitchjay Offline
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No, it's not (if it was correct, we'd be curing 50 cents every single time we quoted a coupon book fee, since that also gets rounded on the LE). This is all spelled out in sections 37 and 38; i'm sure someone will come along with a citation.
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#2067420 - 03/03/16 08:39 PM Re: Tolerance Cure Due to LE Rounding raitchjay
RolTyde Offline
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Anywhere but here
Thanks so much. I knew I couldn't have just completely missed this.

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#2067434 - 03/03/16 08:56 PM Re: Tolerance Cure Due to LE Rounding RolTyde
TXBanker, CRCM Offline
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Show this to your investor...

2. Statements of differences. The dollar amounts disclosed under § 1026.38 generally are shown to two decimal places unless otherwise required. See comment 38(t)(4)-1. As a result, any “Final” amount that is disclosed in the “Calculating Cash to Close” table under § 1026.38(i) is shown to two decimal places unless otherwise required. Pursuant to § 1026.38(t)(4)(i)(C), however, any “Loan Estimate” amount that is disclosed in the “Calculating Cash to Close” table under § 1026.38(i) is shown rounded to the nearest dollar amount, and thus matches the corresponding estimated amount disclosed on the Loan Estimate’s “Calculating Cash to Close” table under § 1026.37(h), which is shown rounded to the nearest whole dollar pursuant to § 1026.37(o)(4)(i)(A). For this reason, a “Final” amount shown to two decimal places could be a larger number than its corresponding “Loan Estimate” amount shown rounded to the nearest whole dollar, when, in fact, the apparent increase is due solely to rounding. Therefore, for purposes of § 1026.38(i)(1)(iii), (2)(iii), (3)(iii), (4)(iii), (5)(iii), (6)(iii), (7)(iii), and (8)(iii), each statement of a change between the amounts disclosed on the Loan Estimate and the Closing Disclosure is based on the actual, non-rounded estimate that would have been disclosed on the Loan Estimate under § 1026.37(h) if it had been shown to two decimal places rather than a whole dollar amount. For example, if the “Loan Estimate” amount of “Total Closing Costs” disclosed under § 1026.38(i)(1)(i) is $12,500, and the “Final” amount of “Total Closing Costs” disclosed under § 1026.38(i)(1)(ii) is $12,500.35, then even though the table would appear to show a $0.35 increase in “Total Closing Costs,” no statement of such increase is given under § 1026.38(i)(1)(iii) so long as the actual, non-rounded estimate (i.e., the estimated amount of “Total Closing Costs” that would have been shown on the Loan Estimate to two decimal places) is equal to $12,500.35.

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#2067436 - 03/03/16 08:59 PM Re: Tolerance Cure Due to LE Rounding TXBanker, CRCM
RolTyde Offline
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Joined: Nov 2008
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Anywhere but here
That is great TXBanker! I told my lender rep that if they couldn't find people who understood the rule, they needed to hire me because I am tired of educating them about it.

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#2067925 - 03/07/16 09:33 PM Re: Tolerance Cure Due to LE Rounding RolTyde
Red Raiders Offline
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Compliance Land
I feel that way about our software provider.... frown
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#2067931 - 03/07/16 09:54 PM Re: Tolerance Cure Due to LE Rounding RolTyde
John Burnett Offline
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Joined: Oct 2000
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Cape Cod
One wonders how many other lenders are being told to "cure" those rounding differences by the same investor, and don't have the background info and stones to question the investor's sanity. Stick to your guns on this one. The investor or its representative (more likely) needs to take some crash courses on TRID rules.

All because a consumer study showed that consumers better understand dollar amounts when they are rounded and truncated.
Last edited by John Burnett; 03/07/16 09:55 PM.
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#2074455 - 04/18/16 01:37 PM Re: Tolerance Cure Due to LE Rounding RolTyde
MonicaMc Offline
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Joined: Dec 2013
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Land of Oz
We are being cited for this by our QC vendor. (Discount point for $236 on LE and $236.25 on CD. Asked why we didn't cure $.25) I assume the above quote is from the Commentary? Does anyone know the citation from the Reg? They previously came out and said that we had to show proof of the exact amounts of fees even though they are rounded on the LE, otherwise it would be a tolerance violation if rounding was the cause.

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#2074475 - 04/18/16 03:32 PM Re: Tolerance Cure Due to LE Rounding RolTyde
Dan Persfull Offline
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Bloomington, IN
The above is the regulatory cite from the Commentary1026.38(e). What other regulatory cite are you looking for?

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#2074553 - 04/18/16 07:14 PM Re: Tolerance Cure Due to LE Rounding RolTyde
John Burnett Offline
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John Burnett
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Cape Cod
Your quality control vendor needs to have its own quality checked out. When lenders rely on vendors who don't know whereof they speak, things can quickly go to perdition in a handbasket.
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#2206263 - 02/14/19 10:31 PM Re: Tolerance Cure Due to LE Rounding RolTyde
Tom P Offline
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Joined: Mar 2015
Posts: 8
What about a Munic Lien Certif which was disclosed on LE for $50 and on the CD it is $50.98?
Technically it seems the LE should have been rounded up to $51.

$0.98 refund due?

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#2206265 - 02/14/19 10:39 PM Re: Tolerance Cure Due to LE Rounding RolTyde
raitchjay Offline
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The way it was actually entered in your system for the LE is the guide here, not how it showed up on the LE (i don't know this fee, but i'll assume it is a zero tolerance item). In other words, if it was entered as $50 even and this is a zero tolerance item, yes, you owe a 98 cent cure. Most LOS's have a tracking system for this and tell you if you need a cure.
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#2206267 - 02/14/19 10:41 PM Re: Tolerance Cure Due to LE Rounding RolTyde
raitchjay Offline
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If it was entered as $50.49 (as you say, you'd assume your system can round up or down properly, so anything above $50.49 you'd think would have shown up as $51)......and this is a zero tolerance item, then your cure would be 49 cents.
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#2206373 - 02/15/19 06:29 PM Re: Tolerance Cure Due to LE Rounding RolTyde
Tom P Offline
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It was entered as $50.98 in the LOS and printed on the LE as $50.
Yes, it is a Section B fee.

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#2206375 - 02/15/19 06:33 PM Re: Tolerance Cure Due to LE Rounding RolTyde
rlcarey Online
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rlcarey
Joined: Jul 2001
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Galveston, TX
Then you have a LOS problem that you need to get on right away. If it makes you feel better, just cure the $.98. More money has been wasted talking about it than it is going to cost the bank.
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#2206381 - 02/15/19 06:58 PM Re: Tolerance Cure Due to LE Rounding RolTyde
Tom P Offline
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Joined: Mar 2015
Posts: 8
I agree. It will look ridiculous sending a check for $0.98.
But I just wanted to verify and be able to say that this is required by federal regulations.
It would be even more ridiculous if the lender sent the check and did not need to......

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#2206390 - 02/15/19 07:33 PM Re: Tolerance Cure Due to LE Rounding RolTyde
raitchjay Offline
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Joined: Oct 2009
Posts: 8,759
OK
As Randy said, if your LOS isn't properly rounding, that's a problem.
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