I am reviewing a file and the lender gave a fourth GFE for a fee. The fee was for a service they knew or should have know would be required for that loan.

So-what do I do now? Do I go back to the 3rd GFE which was provided for a change in loan amount (but not needed because nothing else changed) or do I go back to the 2nd GFE which is when they locked the rate to figure out if there will be a reimbursement due? Or do we just refund the amount charged and call it good? It is 90+ days after closing.

Ditch the fourth GFE. Use the second (or third) for the HUD tolerance comparison. You'll probably end up refunding 90% of the fee depending upon how all the other fees stack up from GFE to HUD.

OK -it was in the 10% category, so I think I figured the reimbursement correctly, but then discovered from the settlement statement on Line 206 they were given a credit for being an employee. This was never disclosed on any GFEs. Does that make Block A wrong too?

No. There's no requirement to disclose a credit on the GFE. You're OK. The credit doesn't affect the tolerance either. The original disclosed amount should be on page 2 of the HUD and carry over to the tables. A credit on page 1 doesn't affect any of that.

OK -thanks - hopefully my last question- since they knew it was an employee from the start, should the credit be disclosed Box 2? For future training purposes.

We don't ever show a credit on the GFE, 'cause then we're bound by that amount. What if, between GFE and closing, the employee was fired or quit? You'd still have to give the credit.

....though I suppose that might be considered a changed circumstance. But it's just cleaner not to worry about credits on the GFE......just my opinion.

We did a home equity no closing costs promotion.....pretty standard fees, so pretty safe. And we new when the GFE was issued that the borrower would be issued a credit. Still, we did not show a credit on the GFE....just in case some the fees happened to drop or be less than disclosed. We didn't want to be strapped into giving the borrower credit for money that wasn't even paid.

Got it! Thank you for all your help!

I just hope it was all sound help. Nobody stepped to say otherwise.