The LE is supposed to show the costs of getting the home, not just the loan.
But, nobody read the offer to purchase completely so the well inspection the buyer wanted done and the parties agreed to split 50/50 never showed on an LE.
If it had, it would have gone in Section H.
But...now that we're finding it at closing, does it go in H on the CD? OR, because we missed it does it go in a tolerance section?
Needless to say, I need regulatory support of some kind too so people will believe me on this one.

Thanks.

I am sure others will chime in with a different opinion, but when this happens, I usually make the decision to pay it in order to be in compliance with the "good faith" part of the reg. And show as a lender credit on the CD, still in Section H.

Copied and pasted from a recent reply on same subject by Randy:

No - what they said is that if a fee that would not normally be subject to a tolerance test was not disclosed in good faith, then it would be subject to 0% tolerance.

3. Good faith requirement for property taxes or non-required services chosen by the consumer. Differences between the amounts of estimated charges for property taxes or services not required by the creditor disclosed under § 1026.19(e)(1)(i) and the amounts of such charges paid by or imposed on the consumer do not constitute a lack of good faith, so long as the original estimated charge, or lack of an estimated charge for a particular service, was based on the best information reasonably available to the creditor at the time the disclosure was provided. For example, if the consumer informs the creditor that the consumer will obtain a type of inspection not required by the creditor, the creditor must include the charge for that item in the disclosures provided under § 1026.19(e)(1)(i), but the actual amount of the inspection fee need not be compared to the original estimate for the inspection fee to perform the good faith analysis required by § 1026.19(e)(3)(iii). The original estimated charge, or lack of an estimated charge for a particular service, complies with § 1026.19(e)(3)(iii) if it is made based on the best information reasonably available to the creditor at the time that the estimate was provided. But, for example, if the subject property is located in a jurisdiction where consumers are customarily represented at closing by their own attorney, even though it is not a requirement, and the creditor fails to include a fee for the consumer's attorney, or includes an unreasonably low estimate for such fee, on the original estimates provided under § 1026.19(e)(1)(i), then the creditor's failure to disclose, or unreasonably low estimation, does not comply with § 1026.19(e)(3)(iii). Similarly, the amount disclosed for property taxes must be based on the best information reasonably available to the creditor at the time the disclosure was provided. For example, if the creditor fails to include a charge for property taxes, or includes an unreasonably low estimate for that charge, on the original estimates provided under § 1026.19(e)(1)(i), then the creditor's failure to disclose, or unreasonably low estimation, does not comply with § 1026.19(e)(3)(iii) and the charge for property tax would be subject to the good faith determination under § 1026.19(e)(3)(i).

As Tracey indicated, I would continue to leave it in H, but would consider it a zero tolerance item [I can control that inside my LOS]

Thank you both.