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10% Tolerance

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  • #13596
    jsevers
    Participant

    We received title today and our CD is due today for 3 day hand delivery. Upon receipt of the title, it indicated additional recording fees are required due to parcel/pin issues. Since we cannot reissue an LE, would this be considered a tolerance violation which would be a cost to cure, showing lender paid on the CD?

    #13614
    rcooper
    Keymaster

    Regulation Z allows you to use the CD to reset tolerances in the event of a changed circumstance. If you believe that you have a changed circumstance (and it sounds like you do) then you would be able to use the CD to reset the tolerance.

    A helpful excerpt from the CFPB’s SECG (see sections 10.2, 11.11, 12.2, 12.3):

    Like with a revised Loan Estimate, a creditor can use a corrected Closing Disclosure to reset tolerances when there is a changed circumstance or other triggering event. (Comment 19(e)(4)(ii)-1)

    The three-business-day waiting period requirement applies to a corrected Closing Disclosure that is provided when:
     The loan’s disclosed APR becomes inaccurate;
     There are changes to the loan product; or
     A prepayment penalty is added to the loan. (§ 1026.19(f)(2)(ii))
    If other types of changes occur, creditors must ensure that the consumer receives a corrected Closing Disclosure at or before consummation. (§ 1026.19(f)(2)(i))

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