I am curious how many others would cure for property taxes under the commentary to 1026.19(e)(3)(iii)-3 if the property taxes were not initially disclosed based on the best information reasonably available to the borrower.

Scenario-in file we have a cost sheet that was used to prepare the LE. On the cost sheet it shows property taxes to be paid at closing. That amount did not make it onto the LE. We are moving towards closing and it was discovered that while we knew property taxes were to be paid at closing that they were left off of the LE.

Would you cure or just make note of it as a violation to the reasonableness requirement of the regulation?

We have differing opinions here on the route to go. I say cure based on the commentary to the regulation and take the conservative route but others do not think that curing is required as the statute is not written in a way to require it and under the statue this would just be a violation. We have all agreed additional training will be happening for the staff involved now we have to decided to cure or not to cure.

Does anyone know how FDIC examiners are approaching this issue?


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).

Your LE was not in good faith - you owe them a cure.

Do you have any thoughts on the statute issue? I think it is a valid argument on my managements side that should be explored.

Is the regulation out of sync with the statute and not enforceable if push came to shove?

I can see my managements issue with a potential cure on this, that this is not a cost of the loan and the applicant knows the property taxes are due. Under the old rules this would have just been a violation of the regulation with not meeting the reasonableness test and we would of added the cost, had the borrower pay and move on. But now........

Again I think we should cure but I am really conservative that it is better to follow the regulation whether it is in sync with the statute or not.

Really I just need an argument to take back to them to hopefully sway them as to why we should follow the regulation and the example in the commentary.

I have already provided the regulatory citation along with the official interpretation, the TRID small entity compliance guide section 7 (7.3 specifically), the FDIC Compliance manual section on TRID good faith requirement and tolerance, and my own opinion.

It is very clear in the commentary - so management is prepared to sue the CFPB for over stepping their interpretive rights under the Statute?

From the CFPB: The statutes, Regulation Z, and its official interpretations are the definitive sources of information regarding the requirements.

https://www.consumerfinance.gov/pol...e/tila-respa-integrated-disclosure-faqs/

CONSUMER CREDIT PROTECTION ACT

§ 105. Disclosure guidelines

(a) PROMULGATIONS, CONTENTS, ETC., OF REGULATIONS.--The Bureau shall prescribe regulations to carry out the purposes of this title. Except with respect to the provisions of section 129 that apply to a mortgage referred to in section 103(aa), such regulations may contain such additional requirements, classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for all or any class of transactions, as in the judgment of the Bureau are necessary or proper to effectuate the purposes of this title, to prevent circumvention or evasion thereof, or to facilitate compliance therewith.

(h) DEFERENCE.--Notwithstanding any power granted to any Federal agency under this title, the deference that a court affords to the Bureau with respect to a determination made by the Bureau relating to the meaning or interpretation of any provision of this title, other than section 129E or 129H, shall be applied as if the Bureau were the only agency authorized to apply, enforce, interpret, or administer the provisions of this title.

(i) AUTHORITY OF THE BUREAU TO PRESCRIBE RULES.--Notwithstanding subsection (a), the Bureau shall have authority to prescribe rules under this title with respect to a person described in section 1029(a) of the Consumer Financial Protection Act of 2010. Regulations prescribed under this subsection may contain such classifications, differentiations, or other provisions, as in the judgment of the Bureau are necessary or proper to effectuate the purposes of this title, to prevent circumvention or evasion thereof, or to facilitate compliance therewith.

[Codified to 15 U.S.C. 1604]

Thank you. That helps. Still learning how to support myself with good sources of information and this source helps a lot.

sometimes management will do what management will do, regardless of the info they are provided. Just document that you told them and you were overridden and move the hose to the next fire.