Lender forgot a fee

The lender forgot to quote the LLPA that goes in block 2 on the GFE.

Can we just waive the fee? Do we have to show it on the HUD-1?

I think it all hinges on whether it's a required service....for example, if you left the appraisal fee off the GFE, yes, you'd need to list it on the HUD-1 as you wouldn't be "waiving" the fee, you'd be "eating" the fee. If it's something like an origination charge, you could simply waive it as there is no "necessity" to have an origination charge for the loan to get made. Just my opinion and how i approach it.

However.....you start waiving fees....especially PPFCs that affect the APR, you had better have clear documentation as to why. The fair lending fairy will find you and ask.

We will be eating the fee. So, since it is a line 802 item - how do I show it?

About the only way to show it is to show out of tolerance on 801 and 803, however you'll end up "eating" it twice.

If the LLPA is less than say, your origination fee...you could consider waiving it and keeping those numbers the same. Just my opinion, but I could see it work that way.

You would be waiving the fee because you screwed up the GFE....would that not make it understandable? I guess i don't follow the logic of showing an origination fee on the HUD-1, and then turning around and showing a lender credit for it. In effect, you are saying "we the bank charged an origination fee to the borrower, but we paid it"....?????

The LLPA fee is likely a 3rd party fee and therefore, not waiveable. My opinion is that a fee paid to the originator, such as an origination, processing or any other you-name-it junk fee could be lowered to offset a screw-up on a 3rd party fee.

End result.. if you total and net origination charges are $1000 on your GFE and $1000 on the HUD...so be it, all's well, you just didn't make the money you meant to off the deal.

I think that's what i'm saying RRJ....i guess i'm talking about a scenario where the GFE is given out with say no origination fee listed.......i don't see any point then of listing an origination fee on the HUD-1, then showing a credit for it. By failing to list it on the GFE, your bank isn't going to make that money for that loan.

probably raitchjay. I think we are saying the same thing a couple different ways!

Hud's response: RESPA doesn't regulate how a bank sets its own rates.

That's a lot of help Seems like HUD is saying don't disclose it, just eat it.

right. It's the cheapest route to take!

I would love to hear HUD's and LauraGipes take on this answer. I know this is what the FAQ's state, but it is the biggest bunch of hooey. Why does 801, 802 and 803 each have their own tolerence (FAQ#10 page 41)? I understand 801 and 802, but 803 is the mathmatical result of 801 and 802. Therefore, if you are out of tolerence on 801 you are going to be out on 803. Why punish the bank twice?