PMI

Our bank funded a RE loan in May of 2008 and sold to FHLB. Through human error, PMI was not disclosed on the TIL. However, the payment (that the customer made in July) includes PMI, insurance and taxes escrowing. What is our options?

PMI is a finance charge and any premiums collected at or before closing are pre-paid finance charges. You have a loan whose APR and finance charges are going to be understated and reimbursement is going to be in order. I'm surprised FHLB has not required you to re-purchase this loan.