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#2175288 - 04/26/18 12:02 AM Curing tolerance violations
Bville Offline
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Bville
Joined: May 2001
Posts: 1,282
Out West
In section 7.14 of the Small Entity Guide for TRID, it says tolerance violations can be cured with a specific lender credit. In the guide to the forms it specifically says if you cure with a credit you have to state there was a change exceeding legal limits.

If we show $500 for the appraisal fee on the LE, but it cost $600, we owe a $100 cure. On the CD, if we show $500 paid by the borrower and $100 paid by the lender, would it answer YES to the "Did this change?" (Does the Final column show only what the borrower paid or the total paid by all parties?) I'm just wondering how easy it is to label a specific lender credit as a credit for an amount that exceeds legal limits.

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#2175343 - 04/26/18 03:25 PM Re: Curing tolerance violations Bville
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,593
Cape Cod
First, don't treat the Guide as the final word. It has no official legal standing, and when there is a conflict between the rule (including the Official Interpretations) and the Guide, the rule and interpretations control.

If you pay for all or part of a service and place the amount the borrower pays in the borrower-paid columns and the portion the bank pays in the "paid by others" column, the amounts in the paid by other column don't affect the Calculating Cash to Close table at all. Only amounts paid by the borrower end up there. And, because the amount acutally paid by the borrower is NOT more than the amount of the estimated cost, there is no tolerance difference to cure. If that's the only cost involved in the closing, the LE amount and the Final Amount for total closing costs will be the same, and you should have a NO under "Did this change?"
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#2175358 - 04/26/18 04:15 PM Re: Curing tolerance violations Bville
Bville Offline
Diamond Poster
Bville
Joined: May 2001
Posts: 1,282
Out West
So, if we cure with a general lender credit or a principal reduction, we must include the verbiage about exceeding legal limits. If we eat the excess with a specific lender credit, it is not really a cure or a violation because the borrower wasn't charged for that portion of the fee. Do I have that right now?

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