A lender inadvertently requested an evaluation for property located in an adjacent county. The appraiser performed an appraisal instead of an eval because the subject property was located outside the bank's market area, which resulted in a higher cost. In the lender's defense, the town is actually located in both counties; he just disclosed the wrong one. On the LE we disclosed the cost of an evaluation. With the cost of the appraisal being more we now plan to show the excess in the paid by other column (L) on the CD. The problem with our LOS is that the system thinks a new zero tolerance fee is being added to the CD and it's showing a cure for the amount that was originally estimated. Our LOS provider says we have a violation for the full amount of the appraisal that needs to be cured. I don't think that is the case; we aren't passing along the increased cost to the consumer. I've searched the threads and know this topic has been discussed before. We have a fee label for an eval and one for an appraisal. We've created one for evaluation/appraisal to remedy this situation. I just want to be sure that I'm thinking correctly. Our external auditors believe that tolerance items have to be cured, that the excess language must appear in the cash to close table. I have understood that as long as a tolerance issue is identified post closing that we could show the item paid by lender--no harm, no foul. Am I missing the boat?

The labels have to stay the same between the LE and the CD. If you change the service from evaluation to appraisal, then the whole appraisal would have to be cured, since this was a lender error. Whether you not you feel that the label "evaluation" and "appraisal" are the same thing, well that is a business decision.

Are you talking a post-closing cure or one that appears on the CD at closing? Review the Small Creditors Guide: https://files.consumerfinance.gov/f/documents/2017-10_cfpb_KBYO-Small-Entity-Compliance-Guide_v5.pdf

See Sections 7.14 and 12.12

Hey Randy, thanks for the response. I meant to say error identified pre-closing--not post-closing.

Then show your external auditors Section 7.14:


Creditors can cure tolerance violations in many ways. For example, a cure for a tolerance violation can be provided by:
 Providing a refund directly to the consumer;
 Providing a principal reduction;
 Providing lender credits, either specific or general, to the consumer.