I can not find in the Reg where you have to truncate a dollar amount if it is a whole number except for loan amount and if there is a range (variable rate products).

We have been written up for this in the Monthly Payment and the Estimated Monthly Payment. I asked the auditor to send me the references but it's the same ones where I read over and over and can't find where it states 'must be truncated if whole number.' He even sent me a guide that does say 'truncate if whole number.'

Can someone help me out?

1026.37(o)(4)

It's for the LE specifically. LE rounds, the CD is precise, which can cause issues as well. We got cited consistently early on by a QC vendor and by an investor or two that wanted to see a cure for rounding related amounts (like 14 cents!).

1026.37(o)(4)(i) talks about dollar amount and it only states (b)(1) to be truncated if whole amount. (b)(1) is the loan amount. It also states that if you have a range of payments, you would truncate.

1026.37(o)(4)(ii) is very clear about truncation for percentages.

Are you saying that we have to follow the truncation requirement for dollar amounts even though it is under the percentage section of the Reg??

Thanks!

Is your auditor referring to 1026.37(o)(4)(I)(C)? That requires rounding for the Estimated Total Monthly Payment in the Projected Payments table if any other items (such as escrow or PMI) are rounded in the table.

1026.37(o)(4)(i)(C).The dollar amounts required to be disclosed by paragraph (c)(2)(iv) of this section shall be rounded to the nearest whole dollar, if any of the component amounts are required by paragraph (o)(4)(i)(A) of this section to be rounded to the nearest whole dollar.

1.Rounding of the total monthly payment.
Section 1026.37(o)(4)(i)(C) requires the total monthly payment amount disclosed under § 1026.37(c)(2)(iv) to be rounded if any of its components are rounded. For example, if the total monthly payment disclosed under § 1026.37(c)(2)(iv) is composed of a $2,000.49 periodic principal and interest payment required to be disclosed by § 1026.37(c)(2)(i) and a $164.49 periodic mortgage insurance payment required to be disclosed by § 1026.37(c)(2)(ii), the creditor would calculate the total monthly payment by adding the exact periodic principal and interest payment of $2,000.49 and the rounded periodic mortgage insurance payment of $164, round the total, and disclose $2,164.

edit- sorry, wrong citation.

He is citing us for disclosing $365.00 instead of $365 in Loan Terms section for Monthly Principal & Interest. He is also citing us for disclosing $365 instead of $365.00 in Projected Payments section for principal and interest.

(Disclaimer: I'm using the LE with Reg Citations from the CFPB for my references:

Just to clarify - he's citing you for using a the full number with decimal places in (b)(3) and a truncated number in "Principal and Interest" line of (c)(2), correct?

Also, a couple of questions:
1. Is this loan in which payment amounts can change?
2. Are you disclosing anything in the Mortgage Insurance or Estimate Escrow lines of (c)(2)?

Yes.

1. No
2. Yes and the amount for Mortgage Insurance/Escrow are rounded and truncated.

So if I have everything straight, I would say he's half wrong. Per the commentary to 1026.37(o)(4):

1.Rounding. Consistent with § 1026.2(b)(4), except as otherwise provided in § 1026.37(o)(4), any amount required to be disclosed by § 1026.37 is not permitted to be rounded and is disclosed using decimal places where applicable, unless otherwise provided.

Loan Terms section: I cannot find anything in 1026.37(o)(4) that says you should round or truncate the amount disclosed for Monthly Principal & Interest amount in the Loan Terms section, even if the amount is a whole dollar amount. If someone else knows that reference, they will have to point it out. As far as I can tell, you did that correctly.

Projected Payments table: On the flip side, I can't find anything that says you can truncate the amount in the Principal & Interest line of the Projected Payments table unless you're disclosing a range of payments. Every other line in that table has to be rounded per 1026.37(o)(4), but there's nothing I can find directed at that line of the Projected Payments table.

Again, if I missed something, I apologize, but that's what I have found from reviewing this section.

This is what I came to too - Thanks so much for helping me out. It is nice to hear other people's thoughts and help me get on the right path.

You bet! That's why these forums are great!