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#2240930 - 08/12/20 02:27 PM No cost refinance showing lender credit on LE
Traceyb258 Offline
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Joined: Sep 2018
Posts: 24
Good morning,

I am hoping someone can help me with a question regarding the LE on a refinance mortgage. We are a no cost institution and our normal practice is to not list any lender paid fees on the LE. In error, a lender paid fee was added to the LE in section B (services you cannot shop for), creating a lender credit in section J. The CD shows the fee as paid by others and the member did not pay the fee. Is this an accurate way to correct the error from the LE or do we need to cure the error by refunding the member the cost of the fee? Thank you for your help.

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TRID - TILA/RESPA Integrated Disclosures Rule
#2240931 - 08/12/20 02:37 PM Re: No cost refinance showing lender credit on LE Traceyb258
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 79,310
Galveston, TX
Well if you showed the fee as payable by the borrower with an offsetting lender credit on the LE and your estimate was accurate - why would you show it differently on the CD? You can't lower the lender credit that was given on the LE.
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#2240932 - 08/12/20 02:43 PM Re: No cost refinance showing lender credit on LE Traceyb258
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,630
Cape Cod
It's a "no harm, no foul" situation.

Let's say the cost of that service in section B was $500 and you showed a lender credit of $500 in Section J on the LE.

On the CD, you showed that service in section B but put the cost in the paid by others column, which is where you put specific lender credits.

If the cost on the CD in the paid by others column was at least $500, that equals or exceeds the lender credit on the LE, and you are fine. No good faith tolerance problem and no disclosure violation.
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#2240935 - 08/12/20 03:00 PM Re: No cost refinance showing lender credit on LE Traceyb258
Traceyb258 Offline
New Poster
Joined: Sep 2018
Posts: 24
Thank you both for your help. I was concerned since it was listed as a lender credit that we would have to reimburse the member the fee. Just wasn't sure and thought it better to ask than assume we were fine.

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#2240944 - 08/12/20 04:13 PM Re: No cost refinance showing lender credit on LE Traceyb258
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,630
Cape Cod
You can optionally identify specific lender credits in the Paid by Others column of the CD by tagging them with an L in parentheses, for example "(L) $500.00". See comment 38(f)-1.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
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