The facts are the facts. Regardless of who actually pays the fee, if it's not the borrower, it should not show in the borrower-paid column on page 2, and there won't be a tolerance violation for that cost. If the seller is generous enough to pay the fee, it goes in the paid by seller column. If the bank realizes it failed to disclose the fee on the LE (or, as in this case, failed to timely issue a revised LE with the fee), it can pay the fee and list it in the Paid by Others column, and there won't be a tolerance violation.
A responsible lender would pay the fee, and not allow the seller to do so.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8