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#2142464 - 08/17/17 06:52 PM Adding a new fee to a revised LE?
RR Becca Offline
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RR Becca
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out of the frying pan...
We have a COC that requires a revised LE to be sent out. In the time since our original LE was issued, our electronic title vendor (required by the state) has added another fee for their services. This fee did not exist when the first LE was sent. Can it be added to the revised LE and captured in the updated tolerance basis now? Or will we still end up needing to cure for it at closing since it is not directly related to the COC?
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TRID - TILA/RESPA Integrated Disclosures Rule
#2142476 - 08/17/17 07:52 PM Re: Adding a new fee to a revised LE? RR Becca
mdosu Offline
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At closing, do you know definitely that this fee will appear on the closing agent's settlement statement? If so, it'll need to be recorded on the disclosures and possibly cured as you suggested.

BTW, your financial institution doesn't necessarily need to provide this cure. You might want to talk to your title vendor and force them to cure, especially if it's their oversight during the initial estimation process. In this case, you'll add the amount as a payment provided by a 3rd party on the LE/CD.
Last edited by mdosu; 08/17/17 07:55 PM.
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#2142478 - 08/17/17 08:00 PM Re: Adding a new fee to a revised LE? RR Becca
RR Becca Offline
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out of the frying pan...
It wasn't an oversight by anybody. The vendor that handles our personal property electronic title filing added a new fee in the time that lapsed between when the first LE went out and now (before 7/1 they didn't charge a fee for printing a title, now they do). I'm just trying to figure out if we can charge it to the borrower or if we're going to have to eat it.
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#2142482 - 08/17/17 08:13 PM Re: Adding a new fee to a revised LE? RR Becca
RR Joker Offline
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If you didn't do a COC within 3 days of 7/1, then I'd say no matter what...it's too late.
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#2142488 - 08/17/17 08:17 PM Re: Adding a new fee to a revised LE? RR Becca
RR Becca Offline
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out of the frying pan...
Are you saying we could have done a COC based on the vendor price hike alone?
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#2142491 - 08/17/17 08:21 PM Re: Adding a new fee to a revised LE? RR Becca
raitchjay Offline
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I think a vendor price hike alone most definitely is not a valid CC. The creation of a brand new fee could be a bit of a different story....stronger argument anyway for a valid CC.
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#2142492 - 08/17/17 08:25 PM Re: Adding a new fee to a revised LE? RR Becca
Compliance NABW Offline
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Yes, if information you relied on changed (title company used to not charge for printing, but now they do), then this would be a valid reason to increase the fee and redisclose the higher amount to the borrower. The timing would depend on when you were made aware of the change to the fee structure (newly established printing fee). If you find this information out on 7/1, then any file using that title vendor would have needed a revised LE to be sent to the borrower by July 6 or 7, 2017 depending on whether you are open on Saturdays or not (assuming you were not open on July 4 as well).

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#2142493 - 08/17/17 08:30 PM Re: Adding a new fee to a revised LE? RR Becca
RR Becca Offline
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out of the frying pan...
You've confirmed what I was thinking. Thanks, all!
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#2142584 - 08/18/17 02:08 PM Re: Adding a new fee to a revised LE? RR Becca
Truffle Royale Offline

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Sorry but I don't think I agree with this being a valid CC. It's not information relied on to add another fee. You need a driving force behind the addition of another fee and a company deciding to add a fee just doesn't cut it in my mind. I think it compares to having the title company break out a wire fee on their invoice when they didn't give you one at the time you did the LE. When I've seen this happen, the company has given advance warning that after x date, the fee would be charged. That gave us sufficient time to begin adding it to LEs in anticipation of the loan closing after the fee effective date. If the company didn't do this, I'd be all over them to grandfather in this loan at the old pricing.

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#2142682 - 08/18/17 05:45 PM Re: Adding a new fee to a revised LE? Truffle Royale
RR Joker Offline
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Originally Posted By Truffle Royale
Sorry but I don't think I agree with this being a valid CC. It's not information relied on to add another fee. You need a driving force behind the addition of another fee and a company deciding to add a fee just doesn't cut it in my mind. I think it compares to having the title company break out a wire fee on their invoice when they didn't give you one at the time you did the LE. When I've seen this happen, the company has given advance warning that after x date, the fee would be charged. That gave us sufficient time to begin adding it to LEs in anticipation of the loan closing after the fee effective date. If the company didn't do this, I'd be all over them to grandfather in this loan at the old pricing.


I do believe this conforms with the opinions in the old GFE/HUD rules...just not sure we have anything similar for TRID.
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#2142690 - 08/18/17 05:57 PM Re: Adding a new fee to a revised LE? RR Becca
rlcarey Offline
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They are your preferred or direct vendor - it is your responsibility work with them to avoid this issue. You can't increase the borrower's closing costs because your vendor raised their prices on a whim.
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#2142693 - 08/18/17 06:00 PM Re: Adding a new fee to a revised LE? RR Becca
raitchjay Offline
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Randy, Becca's original post wasn't so much about prices being raised, but a completely new fee being put into place after the issuance of the original LE(by the state electronic title vendor). Does that change your opinion?
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#2142697 - 08/18/17 06:02 PM Re: Adding a new fee to a revised LE? RR Becca
raitchjay Offline
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I totally agree on the increase of an existing fee....just a bit unsure when it's a totally new fee....and a new fee for a non-shoppable, state govt. sanctioned item at that.

Just looking for clarity...thanks.
Last edited by raitchjay; 08/18/17 06:06 PM.
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#2142705 - 08/18/17 06:15 PM Re: Adding a new fee to a revised LE? RR Becca
rlcarey Offline
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I might buy a State mandated fee, if you revised all of your outstanding LE's within three business days of learning about it. But just because your vendor decides to charge you a new fee for their ice cream social on Friday afternoons - not so much.
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#2142706 - 08/18/17 06:17 PM Re: Adding a new fee to a revised LE? RR Becca
raitchjay Offline
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OK
Thanks.
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#2142707 - 08/18/17 06:17 PM Re: Adding a new fee to a revised LE? RR Becca
RR Becca Offline
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out of the frying pan...
I apologize if the details of my question were unclear. Here is a more thorough description of what happened:

Part of the collateral for this loan is a titled mobile home. The state of GA requires electronic processing of titles for personal property, and we have chosen Vendor X to handle that for us (there are only a handful to pick from). Before 7/1/17, Vendor X only charged a processing fee per title. The original LE for this loan was issued prior to 7/1, so it only included that electronic title processing fee. Beginning on 7/1/17, Vendor X began charging an additional "printing fee" per title.

Yesterday we received a request from this borrower to increase the loan amount. In the course of issuing a revised LE to show the higher loan amount and increased fees that resulted from it, somebody in doc prep noticed that this loan should have the title printing fee but didn't. So the question became whether the borrower could be charged that fee at this point or if the bank would have to eat it.

We went with eat it, because even if it *could* have been captured as a tolerance basis increase we are obviously more than 3 business days past 7/1.
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#2142709 - 08/18/17 06:24 PM Re: Adding a new fee to a revised LE? RR Becca
RR Joker Offline
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I know we have a printing fee only if we request a paper title...curiously, is that the case with your situation? Otherwise, what would that fee before since the transmittal is otherwise electronic only?
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#2142713 - 08/18/17 06:31 PM Re: Adding a new fee to a revised LE? RR Becca
RR Becca Offline
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out of the frying pan...
Yes, it's for the paper titles. We get one for all files.
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#2142720 - 08/18/17 06:41 PM Re: Adding a new fee to a revised LE? RR Becca
Truffle Royale Offline

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again, how does a vendor raise a fee without notifying you first?
Most recent one I recall is the cbr went up and everyone was notified long in advance that on x date, it would cost more.
So any loan that could possibly close after that date got the fee added, just in case.

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#2142725 - 08/18/17 06:53 PM Re: Adding a new fee to a revised LE? RR Becca
RR Becca Offline
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out of the frying pan...
Sometimes not all of us get the memo about these things in a timely manner. smirk
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#2142727 - 08/18/17 06:55 PM Re: Adding a new fee to a revised LE? RR Becca
RR Joker Offline
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Originally Posted By RR Becca
Yes, it's for the paper titles. We get one for all files.


That's something you want that isn't actually necessary. That is enough for me to say no way can you capture it other than going forward.
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#2142730 - 08/18/17 07:15 PM Re: Adding a new fee to a revised LE? RR Becca
rlcarey Offline
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Is this a section B or C fee??
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#2142754 - 08/18/17 08:10 PM Re: Adding a new fee to a revised LE? RR Becca
RR Joker Offline
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B
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#2142757 - 08/18/17 08:16 PM Re: Adding a new fee to a revised LE? RR Becca
raitchjay Offline
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OK
I was originally thinking it was a C. fee too.....
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#2142758 - 08/18/17 08:34 PM Re: Adding a new fee to a revised LE? RR Becca
Truffle Royale Offline

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Originally Posted By RR Becca
Sometimes not all of us get the memo about these things in a timely manner. smirk


I can relate. But that only confirms my thoughts from the get go. Someone at your bank goofed and a bank error is never a valid CC.

As for where the fee goes, the bank chose the provider so it's a B fee.

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