In a situation where a verification of deposit was disclosed initially, but should have been a verification of employment, do we have to cure the amount since the wrong fee name was input? We disclosed the fee timely with the correct amount, however the wrong fee name was selected and corrected past the three day revision requirement.

(iv) Changes due to clerical errors. A creditor does not violate paragraph (f)(1)(i) of this section if the disclosures provided under paragraph (f)(1)(i) contain non-numeric clerical errors, provided the creditor delivers or places in the mail corrected disclosures no later than 60 days after consummation.

Does it affect anything if we made the discovery and corrected prior to consummation?

If you corrected the non-numeric clerical error prior to consummation then you do not need to do anything else.

Can you clarify, please? Where did the error appear? On the Loan Estimate or on the first Closing Disclosure?

On the first loan estimate, then we corrected on the CD.

You put the wrong service on the LE. You can't correct that.

You drew the Monopoly card that says: Lender error: Do not pass Go - Do not collect $200

The reason I asked my question was to contrast that scenario (I agree with Randy 100% on that) with one in which the error was made on the initial Closing Disclosure. Assume that the term "Verification of Employment" was used on the LE, but "Verification of Deposit" was used in error on the initial Closing Disclosure. If you realized that and issued a corrected CloD at the closing, you'd be fine. In fact, the provision for changes due to clerical errors in 1026.19(f)(2)(iv) that Dan cited above would allow you to send a corrected CloD after the closing.

Are you saying he could not correct the clerical error?

Official Interpretation

19(f)(2)(iv) Changes due to clerical errors.

1. Requirements. Section 1026.19(f)(2)(iv) requires the creditor to deliver or place in the mail corrected disclosures if the disclosures provided pursuant to § 1026.19(f)(1)(i) contain nonnumeric clerical errors. An error is considered clerica if it does not affect a numerical disclosure and does not affect requirements imposed by § 1026.19(e) or (f). For example, if the disclosure identifies the incorrect settlement service provider as the recipient of a payment, then § 1026.19(f)(2)(iv) requires the creditor to deliver or place in the mail corrected disclosures reflecting the corrected non-numeric disclosure no later than 60 days after consummation. However, if, for example, the disclosure lists the wrong property address, which affects the delivery requirement imposed by § 1026.19(e) or (f), the error would not be considered clerical.

The Clerical Error provision applies to errors on the CloD. In this case, the fee was mis-identified on the LE, which means that there was a correctly-identified Verification of Employment fee on the CloD that wasn't identified on the LE, and that would trigger a tolerance violation.

So you are saying because the clerical error was made on the LE there is 100% cure?

The above commentary references both section (e) & (f) in the clerical error definition. As long as the clerical error did not affect the delivery requirement of the disclosure or the numeric values I don't see where a cure is required.

If you are simply referring to a disclosure error on the LE that cannot be corrected then I would buy into that, but not a cure for correcting the clerical error on the CD prior to consummation.

If there is a cure because of this then there has to be a section of .19, .37 or .38 I have missed.

The assertion in my example is that the disclosure on the LE can't be corrected because the clerical error exception as described in both the regulatory text and the commentary applies if the disclosures provided pursuant to § 1026.19(f)(1)(i) contain nonnumeric clerical errors.

On the other hand, an error in spelling the street name that doesn't affect delivery of the disclosures (1st Avenu instead of First Avenue) on both the LE and the CloD can be corrected by issuing a corrected CloD within the time limit.

This is a real eye-opener. We've implemented templates in our system that will prevent this from occurring again. Thank you all for your input on the issue.

I've read this and the reg numerous times and am still confused.
If the wrong fee NAME is used on the LE, will using the correct name on the CD be ok, meaning no cure is necessary?
An error is considered clerical if it does not affect a numerical disclosure and does not affect requirements imposed by § 1026.19(e) or (f)
(e) is the LE
EX: LE # 1 and #2 show RD guarantee fee
LE #3 mistakenly shows it as Mortgage Insurance
CD will show RD guarantee fee
Amount of fee is consistent throughout.
No cure, correct?

Your baseline is established with your first LE unless there is a changed circumstance.

You have a technical violation on your LE #3 for failure to use consistent terminology.

Thanks, Randy. I appreciate the reinforcement.