Effective 1-1-18, California began to impose a new $75 recording fee per document (in addition to the normal recording fees). We have several loans that were started in 2017 but closing in 2018 when the new fee becomes mandatory. We did not include this fee in our Loan Estimate when it was issued in 2017. Can we charge this fee to the borrower or would the bank need to absorb since it is a new fee? If we can charge it to the borrower, can we add via the Closing Disclosure? Thank you.

I would have re-issued an LE on 1-2-2018 to capture the fee. Without having done that, i think you're going to have to eat anything in excess of your 10% tolerance for that category. Just my off the cuff take on it.

Thank you!

You MUST show it on the CD because it's a cost to the borrower.
You will be curing for anything over 10% on all the loans you failed to redisclose to capture what was a valid CC.

Just to be clear, if the lender knew of the added fee at the time the LE was sent, and head reason to believe the loan would close in 2018, but failed to include it on the LE, there can't be a changed circumstance. The lender knew (or should have known) that the cost would be imposed.

If the LE was provided in good faith, and the lender learned of the new fee being imposed in 2018 after the LE was provided, the day the lender learned of the fee triggered the start of the 3-day window for delivering a revised LE under the changed-circumstance rules.

If the fee was announced on December 15, it would be too late to send a revised LE on January 2 in an attempt to avoid the tolerance violation.

But don't forget that the 10% tolerance is calculated on the recording fee(s) and all the other fees in the 10% "bucket," not on the recording fee(s) by themselves.

If you issued an LE in early December on a loan you expected to close before 1/1/18, and you left off the increased recording fee that you knew about but also knew would not apply because of the expected closing date, a postponement of the closing into January would be your changed circumstance triggering the revised LE withing three business days.

Thank you - that all makes sense.

We were recently notified that recording fees will increase January 1, 2020. Would there be any issue to start quoting the new recording fee early November to cover if the loan closes in 2020? If the loan closes prior to Jan 1, we would collect the current recording fee.

You should disclose based on your estimated closing date for the specific transaction.

John gives good guidance in his above posts for what to do if the closing is delayed.

I'm likely going to start including our increased fee very soon. It's not so large of an increase that it will make a difference under good faith, but is enough to possibly cause a problem with tolerance.

we always bump in anticipation of increases we know are coming. I usually pick a date 8 weeks or so out and every LE done after that has the increased cost on it. If we get lucky and the loan closes prior to the increase kicking in, the borrower pays less. No harm, no foul in disclosing because we did so in good faith.