[TheBank]

We use a 6 month average to determine the charge for our credit report/credit score notice. If we get an odd amount, for example $4.62, then we round down, for example, to $4.50. Is that permissible and would not cause any other GFE/HUD issues with the discounted cents?

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[rcooper]

I don’t see a problem with your rounding down. The RESPA FAQ states:

4) Q: How is an average charge calculated?
A: The settlement service provider using an average charge must define a specific class of transactions for a specific time period (not less than 30 calendar days, nor more than 6 months), for a specific geographical area, and for a specific loan type. The average charge is based on a calculation of the average amount paid for the settlement service for the particular class of transaction. HUD does not prescribe a particular method for calculating the average charge, but it must be determined in such a way that the total amounts paid by borrowers and sellers through use of an average charge will not exceed the total amounts paid to the applicable settlement service providers in the particular class of transactions.

6) Q: If the charge for a settlement service is calculated using average charge, may the charge be waived or discounted?
A: Yes. The regulations prohibit charging more than the calculated average charge, but discounting or waiving a charge to a borrower is permitted.

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