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#2273741 - 08/03/22 06:40 PM Fee omission on CD
WDCA Offline
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Joined: Nov 2015
Posts: 85
Is it permitted to issue a revised closing disclosure because a borrower paid/before closing appraisal fee was erroneously left off the initial CD?

We identified a loan where we ordered 2 appraisals (which is a separate problem) and for this loan we issued a CD with only one appraisal fee for 400.00 that was paid by the bank. The other appraisal that was paid by the borrower before closing was left off the initial closing disclosure. A revised closing disclosure was issued to correct the omission at closing to include the borrower paid/before closing fee of 550.00.

If it's not permitted, do we owe a credit to the borrower in order to correct this? Thank you

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TRID - TILA/RESPA Integrated Disclosures Rule
#2273750 - 08/03/22 07:55 PM Re: Fee omission on CD WDCA
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
You left out a key piece of information. What was disclosed on the loan estimate?

The omission from the closing disclosure is a Reg Z and TILA violation, but it may not require a tolerance lender credit. What's on the loan estimate will better inform the response to your question.
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#2273753 - 08/03/22 08:59 PM Re: Fee omission on CD WDCA
WDCA Offline
Member
Joined: Nov 2015
Posts: 85
They disclosed 1200.00 on the LE but the cost was only 400.00. So the initial CD had 400.00 but listed as paid by the bank. The new appraisal for 550.00 was not on the LE or initial CD. Thanks

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#2273766 - 08/04/22 12:20 PM Re: Fee omission on CD WDCA
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 82,977
Galveston, TX
It is not the dollar amount on the LE that is important, it is the dollar amount for the required services. Are you saying you issued an original LE with $1200 for two lender required appraisals on the initial LE? How is that possible?
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#2273769 - 08/04/22 12:51 PM Re: Fee omission on CD WDCA
WDCA Offline
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Joined: Nov 2015
Posts: 85
No, the 1200.00 was the estimated cost for the first appraisal which ended up only costing 400.00. So the initial closing disclosure was issued with only the 400.00 appraisal which was paid by the bank. The 550.00 appraisal was erroneously left off and therefore they issued a revised CD at closing to include both the 400.00 (bank paid) and 550.00 (borrower paid before closing) appraisals. My question is since it was left off the first initial closing disclosure, are we subject to reimburse the borrower? Or was this an error that we were are able to correct with the revised closing disclosure? Thanks again

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#2273771 - 08/04/22 12:56 PM Re: Fee omission on CD WDCA
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 82,977
Galveston, TX
the 1200.00 was the estimated cost for the first appraisal which ended up only costing 400.00

Then you owe them the $550 for the second appraisal, as it was never disclosed.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2273772 - 08/04/22 01:00 PM Re: Fee omission on CD WDCA
WDCA Offline
Member
Joined: Nov 2015
Posts: 85
Thanks, I appreciate the responses.

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