After an internal audit it appears the loan processor was not putting the payoff in the loan estimate thus making the cash to close wrong. However, in every instance the closing disclosure did have the payoff amount and the cash to close was correct.

The processor said she didn't know she could put the payoff in the loan estimate.

My question is where does this fall just an exception or a violation. Yes we have updated our procedures to fix the issue but we have several refinance loans that have incorrect LE (based on cash to close being wrong) but correct CD.

Recommendations?

LEs are one and done once they're delivered to the borrower.
You've identified the issue and trained to fix it so document and move on.