A mortgage loan required PMI and the premium was underdisclosed. The lender wants to buy down the loan and charge a large fee. We suggested the borrower pay what was underdisclosed but the lender says no. It was an error on the documents that was not caught and cannot be changed says the lender. What would be the best way to resolve this issue?

Talk to your legal counsel. If this loan was subject to Reg Z. and it was underdisclosed - you owe the money to the borrower anyway.