Good afternoon!

I'm doing quality control on the broker loans for our bank. On one loan I'm looking at, on the final CD, I noticed a Lender Cure for fees above the legal limit and for the life of me, I could not get to that amount using the Loan Estimate provided to me. It was explained to me that the recording fees on the first CD--the 3 days before closing CD--had been entered as $129. For the final CD, they had been entered as $162, causing a tolerance violation and a cure. Here's the play-by-play:

First LE: 4-16-19 Recording Fees are $150
Change in Circumstance LE: 5-10-19 Recording Fees are $150
Prelim CD (3 days prior to close): 5-14-19 Recording Fees are $129
Final CD: 5-15-19 Recording Fees are $162 causing a $20.10 cure

I asked if the Prelim CD was also a rate lock or was intended to reset the tolerance in any way and I was told no. So if a prelim CD isn't resetting tolerances, shouldn't we be using the Loan Estimate numbers to match to the final FINAL CD? Not the preliminary CD, from 3 days before closing? There were other fees that changed from the 3 days prior to close CD and the final CD and those weren't being considered as a reset to the LE fees. There were other cures for an appraisal and for a pest inspection and those fees were based off the last LE amount, not the 3 day prior to close. I am so confused as to why these recording fees are different.

Thank you for your help.
Monica

The tolerance baseline is always what is on the initial LE, unless there has been a changed circumstance to raise them or if the fee is interest rate dependent and the rate was locked - then set to that amount. A rate lock would not impact recording fees. Testing from initial CD to final CD is not appropriate. We have seen that some investors may require it, but I think that too has gone by the wayside with the seasoning of TRID.

I thought I was losing my mind there for a minute. All right thank you! I will get with our processor and have her ask the company what their investor procedures are.

Thank you!
Monica

The recording fees are covered by 1026.19(e)(3)(ii), so they get lumped in with any other 10% closing costs for determination of any need for a cure. If the recording fee on the loan is the only 10% cost, it could have gone to $165 without a violation or cure.

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