LS/PR might be a viable option for a few consumer loans, but not for a portfolio of mortgages. In these cases, it's apparent benefits are an illusion.
Although the TIL policy may permit LS/PR, FASB standards may force you to mark the value of these repriced assets to market (i.e.-an additional lump-sum charge-off.) Assuming rates haven't changed significantly from the time of origination until the APR understatement is discovered, you will be charging off the loss that is created when you devalue your loan by reducing its yield.
Needless to say, if the loans have been sold to an investor, you will not be able to change any of the loan terms unless/until you repurchase the faulty loans. Now you add a trading expense to the cost of the adjustments. When you're done adjusting the payments and interest rates, you have loans that can't be sold again at par because their yields are below prevailing market.
The only time LS/PR makes sense is when you're committed to holding the reduced-yield loans in your portfolio until maturity. Otherwise, you're going to suffer the full lump-sum loss, no matter how you handle the reimbursement.