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#2124373 - 03/30/17 03:27 PM Charge on CD but not listed on LE
mdog76 Offline
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We can't list a charge on the CD that wasn't on the LE originally correct? We have to eat the cost or show a lender credit right?

Just wanting to check myself.

Thank you

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#2124374 - 03/30/17 03:33 PM Re: Charge on CD but not listed on LE mdog76
raitchjay Offline
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Depends on what charge we're talking about. Zero tolerance item--you are eating it. 10% tolerance item--you're most likely eating most of it, but it depends on what your tolerance calculation shows. Unlimited tolerance item--you have an error on your LE for not listing it, but you don't have to eat it (at least, that's my interpretation...others too i think).
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#2124378 - 03/30/17 03:39 PM Re: Charge on CD but not listed on LE mdog76
mdog76 Offline
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It was a courier fee so its not subject to zero percent but I didn't think we could add a charge to CD that wasn't listed and disclosed to the customer on the LE.

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#2124388 - 03/30/17 03:54 PM Re: Charge on CD but not listed on LE mdog76
mdog76 Offline
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Just to add, the additional courier fee does not throw us out of tolerance. There were fees on LE that ended up not being charged on the CD so we are fine tolerance wise.

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#2124391 - 03/30/17 04:04 PM Re: Charge on CD but not listed on LE mdog76
Docs Offline
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You can add any additional fees you want to the CD, but if they result in a tolerance violation the lender needs to provide a cure.
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#2124394 - 03/30/17 04:32 PM Re: Charge on CD but not listed on LE mdog76
raitchjay Offline
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Also to add: you can't count fees that didn't end up getting charged in your tolerance calculation.
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#2124396 - 03/30/17 04:36 PM Re: Charge on CD but not listed on LE mdog76
Truffle Royale Offline

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ditto re: there's nothing stopping you from adding fees. In fact, you're supposed to show all fees incurred as a cost of doing the loan, not just eat them to avoid tolerance issues.

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#2124400 - 03/30/17 04:44 PM Re: Charge on CD but not listed on LE mdog76
mdog76 Offline
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But wouldn't the courier charge need to be shown as a lender credit though since the customer was not aware of the charge on the ?LE?

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#2124402 - 03/30/17 04:48 PM Re: Charge on CD but not listed on LE mdog76
raitchjay Offline
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No. But again, you mention that fees "ended up not being charged".....again, if a fee isn't ultimately charged, you can't use it in your tolerance calculation to help offset the fee you forgot to list on the LE.
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#2124410 - 03/30/17 05:12 PM Re: Charge on CD but not listed on LE mdog76
Truffle Royale Offline

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Let's say you didn't redisclose the LE when you found out that an appraisal recertification was required. Do you leave the recert off the CD? No. You show it and do the tolerance calculations and pay any cures. Same goes for any other fee, including your courier charge. It's a cost of doing the loan so it has to be on the CD. The only issue is who's going to pay for it because it wasn't on any LE.

Here's another example. A week before closing, the borrower decides to hire an attorney to come to closing for them. You don't have time to redisclose the LE. You must put the fee on the CD but, because it's not required to get the loan, it goes in H and the borrower pays the whole charge.

Hope these examples help you wrap your head around the courier fee addition.

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#2124423 - 03/30/17 05:38 PM Re: Charge on CD but not listed on LE mdog76
RR Joker Offline
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mdog76...who is requiring the fee...if it's the bank, it's also a ppfc and if I'm not sadly mistaken...zero tolerance.. If it's a fee required by the SA, and not anything the bank requires, then it's 10% and should not be a ppfc if it would be charged/required in a comparable cash transaction.
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#2124432 - 03/30/17 06:04 PM Re: Charge on CD but not listed on LE mdog76
mdog76 Offline
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Its payable to the settlement agent.

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#2124434 - 03/30/17 06:05 PM Re: Charge on CD but not listed on LE mdog76
raitchjay Offline
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Did you allow them to shop for title services....and they did shop? Or this was your provider, and the fee just got omitted from the LE?
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#2124435 - 03/30/17 06:08 PM Re: Charge on CD but not listed on LE mdog76
Truffle Royale Offline

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To tag on to raitchjay above, or did the settlement agent throw on a fee at the last minute? No matter if the agent is on your provider list or not, I'd be having a word with them about adding fees late in the game.
If you picked the agent, I'd also be talking to them about throwing stuff on they know you're going to have to eat.
If the borrower picked the agent, they pay the fee but again I'd let their agent know that it's not cool to add on late.

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#2124439 - 03/30/17 06:23 PM Re: Charge on CD but not listed on LE mdog76
mdog76 Offline
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It was a settlement agent that the customer picked from our provider list.

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#2124442 - 03/30/17 06:29 PM Re: Charge on CD but not listed on LE mdog76
raitchjay Offline
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Then it's subject to 10% tolerance...i'm sorry to harp on this, but it hasn't really been aknowledged...i'll say it one last time--you mentioned earlier that certain fees weren't charged which gave you leeway for tolerance purposes, and again i stress....no they do not. If a charge that you listed on the LE is ultimately not charged, it cannot be considered in establishing your tolerance baseline.
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#2124459 - 03/30/17 07:03 PM Re: Charge on CD but not listed on LE mdog76
mdog76 Offline
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After going back and looking, the lender's title policy charge dropped enough that the addition of the courier charge didn't put us into a tolerance violation.

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#2128768 - 05/02/17 04:10 PM Re: Charge on CD but not listed on LE mdog76
complyorelse Offline
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We have a similar situation but are dealing with a zero tolerance item, an escrow waiver fee. This was not disclosed on the LE at all and was only discovered upon preparation of the CD. Based on what I've read, I believe we have to add it to the CD and cure the amount of the fee. However, since we can't charge the fee at this point, it makes me question if we actually have to put the fee on the CD at all since it's not a cost associated with this particular loan.

Also, this is an item that would affect the APR, so that adds in another layer of concern for me. If we do have to add the fee to the CD and cure it, should we add it into the APR calculation since the borrower won't actually pay it?

Any guidance is appreciated. Thank you.

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#2128775 - 05/02/17 04:30 PM Re: Charge on CD but not listed on LE mdog76
raitchjay Offline
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My understanding of these situations is that any bank fee (the bank will receive and keep the fee) can always be just not charged. For example, if the bank forgot to put the origination fee on the LE--you wouldn't have to list the fee on the CD and then show the bank paying it (paying itself). The bank missed the chance to properly disclose the fee on the LE, so to eat it, they simply don't charge it. My opinion.
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#2128782 - 05/02/17 04:45 PM Re: Charge on CD but not listed on LE mdog76
complyorelse Offline
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Thank you for the input, Raitchjay. Would the same be true if it were a third party charge such as an appraisal fee not being disclosed at all? I know that if the credit report fee increases, we have to cure the difference. Just not sure if an item is left off altogether.

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#2128789 - 05/02/17 05:10 PM Re: Charge on CD but not listed on LE mdog76
raitchjay Offline
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Third party fees have to be listed on the CD...and cured for if need be.
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#2128794 - 05/02/17 05:15 PM Re: Charge on CD but not listed on LE mdog76
complyorelse Offline
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Makes sense. I really appreciate it.

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#2128867 - 05/02/17 08:17 PM Re: Charge on CD but not listed on LE mdog76
John Burnett Online
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IMO those 3rd party fees can be put on the CloD in the Paid by Others column (tagged "(L)" for lender) and, since they aren't being paid by the borrower, won't need to be "cured."
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#2128869 - 05/02/17 08:23 PM Re: Charge on CD but not listed on LE mdog76
raitchjay Offline
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I agree John....i probably shouldn't have used the word "cured". "Paid for" would have been better.
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#2128870 - 05/02/17 08:25 PM Re: Charge on CD but not listed on LE mdog76
Dan Persfull Online
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If the error is caught at the time the CD is being prepared or before closing we do what John suggests. If it's discovered after the closing then we issue a revised CD showing the applicable cure.
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