I am sorry - I do not understand. You initially disclosed a $650 charge that set your baseline for tolerances. The fact that you were told later in error by the title company and you disclosed $350 on a revised LE in good faith at the time does not impact your original tolerance baseline. A revised LE that is in good faith at the time does not lower the original baseline tolerance. You use change of circumstance disclosures to raise your baselines and not lower them, unless the fee or lender credit is interest rate dependent involving a rate lock.
Randy, as I'm seeing my answer disagrees with yours, could you confirm that a revised LE with lower fee limitations would not necessarily dictate a lender credit if the fee went back up? The guidance we had received (OCC midwest) was that the last LE would govern absent a valid changed circumstance - and this specific case doesn't seem to rise to that level.
I want to be able to guide my lenders appropriately, too, but that goes against what we had been told for several exam cycles (albeit verbally).