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“Services You Cannot Shop For” (FHA Upfront MIP)

Question: 
I have two questions regarding TRID. 1. A fee that should have been disclosed on the Loan Estimate section “Services You Cannot Shop For” (FHA Upfront MIP) was inadvertently disclosed in the “Other Costs” section. It was disclosed in the correct section on the Closing Disclosure. What is the violation and cure for this error? 2. A fee of $555 was disclosed for the appraisal on the Loan Estimate for an FHA loan. This estimate was in good faith and considered the likelihood that repairs be requested as a result of the appraisal. On the Closing Disclosure the fees were listed as Appraisal - $400 and Inspection Fee/Additional Appraisal Fee - $100. Is this subject to a cure?
Answer: 

by Randy Carey:

1. 100% cure.

2. $100 cure.

Answer: 

by John Burnett:

The answer to your second question illustrates how important it is to be consistent in labeling the costs on the loan estimate and closing disclosure. If you had consistently used "Appraisal/Inspection Fee" on the LE and the CloD, the change from an estimate of $555 to an actual cost of $500 would not have been a problem. The same would have been true had the $555 figure been split on the LE into an "Appraisal Fee" of $400 and an "Inspection/Additional Appraisal Fee" of $155, followed by the two costs as you disclosed them on the CloD.

Emerson wrote "A foolish consistency is the hobgoblin of little minds." He clearly could not have imagined the TRID rule. But what may appear as insistence upon "foolish consistency" is one of the linchpins of the whole loan estimate - closing disclosure concept, because it facilitates the consumer's ability to quickly match the estimate with the final cost on the two disclosure documents.

The creditor is responsible for, and therefore must assume control of, the content of each of the disclosures, whether it delegates the preparation of the closing disclosure out to the settlement agent or not. For that reason, the creditor has to have the final say on how costs are described on the two documents, even if it means dictating terminology to the settlement agent.

First published on 01/20/2019

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