[belandis]

It is our understanding that only the following can be under the Other Costs/E. Taxes and Other Government Fees subheading on the Loan Estimate:
-Recording Fees and Other Taxes
-Transfer Taxes

We cannot itemize, delete, or add to these items.

However, on the Closing Disclosure, we are to itemize each amount expected to be paid, including an itemization of transfer taxes with the name of the government entity assessing the transfer tax.

When we itemize transfer taxes on the Closing Disclosure, we are getting a cure tolerance because the transfer taxes were not itemized on the Loan Estimate. We believe that we are disclosing in accordance with the regulation and that our LOS is not functioning properly. Our LOS gives us the option to itemize transfer taxes on the Loan Estimate, but we do not think that we are supposed to do this since 1026.37(g)(1) states “on the second line, the sum of all transfers taxes paid by the consumer, labeled ‘Transfer Taxes’.”

Therefore, we’d like confirmation that our understanding of the requirements regarding itemization are correct before we contact our LOS for resolution.

[rcooper]

Have you tested the software to see if it actually itemizes the transfer taxes on the LE or if it is just asking for that information for comparison purposes with the CD and actually disclosed the sum on the LE? I am not understanding why itemizing on the CD is causing it to be out of tolerance.

If I am misunderstanding something please let me know.

[belandis]

We determined that the software does not actually itemize the taxes the LE and is just wanting it itemized for comparison purposes. In this case, we failed to itemize on the LE in the software. We didn’t realize it until after the CD was generated. The software does not permit us to make changes on the LE once a CD has been produced. Our failure to itemize on the LE resulted in the software identifying a cure tolerance.

[Author]

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