I am going to ask a fairly easy question but it is late and I am not reasoning this out on my own right now.

Would a fee that normally would be a prepaid finance charge if paid by the borrower NOT be a prepaid finance charge if paid by the lender due to missing the fee on the Loan Estimate. The fee is a 0% tolerance and the full fee was paid by the lender at closing.

Reviewing a file currently and trying to re-calculate the finance charge and APR.

If the fee would have gone into the creditor's pocket, isn't "paid by the lender" the same as "waived?" If there is no charge, then there can't be a "Finance Charge", prepaid or otherwise. Fees owed to third parties (up front PMI, for example) but absorbed by the lender are likewise not "charges" to the consumer and therefore not FCs.

Thank you that is what I thought but started doubting my self when I took it to the department and got push back. Being late on a Friday didn't help my poor brain.

It was a third party fee that was missed on the initial Loan Estimate that we required and should have known about which is a different issue I will be addressing.