[tashabeads]

When disclosing the Transfer Tax on the LE, it rounds to the nearest whole dollar. Then on the CD, we disclose the actual amount. For example, if the transfer tax is $62.30, we would disclose $62 on the LE and $62.30 on the CD. DocMagic tells us to do a 30 cent tolerance cure. How are other banks handling this? We’ve kicked around just disclosing $63 on the LE so it won’t create a tolerance issue. Thoughts?

[rcooper]

You would compare the CD charge to the actual, non-rounded estimate that would have been disclosed on the Loan Estimate under § 1026.37(h) if it had been shown to two decimal places rather than a whole dollar amount. The comment below discusses this issue.

Comment 38(i)-2:
Statements of differences. The dollar amounts disclosed under § 1026.38 generally are shown to two decimal places unless otherwise required. See comment 38(t)(4)-1. As a result, any “Final” amount that is disclosed in the “Calculating Cash to Close” table under § 1026.38(i) is shown to two decimal places unless otherwise required. Pursuant to § 1026.38(t)(4)(i)(C), however, any “Loan Estimate” amount that is disclosed in the “Calculating Cash to Close” table under § 1026.38(i) is shown rounded to the nearest dollar amount, and thus matches the corresponding estimated amount disclosed on the Loan Estimate’s “Calculating Cash to Close” table under § 1026.37(h), which is shown rounded to the nearest whole dollar pursuant to § 1026.37(o)(4)(i)(A). For this reason, a “Final” amount shown to two decimal places could be a larger number than its corresponding “Loan Estimate” amount shown rounded to the nearest whole dollar, when, in fact, the apparent increase is due solely to rounding. Therefore, for purposes of § 1026.38(i)(1)(iii), (2)(iii), (3)(iii), (4)(iii), (5)(iii), (6)(iii), (7)(iii), and (8)(iii), each statement of a change between the amounts disclosed on the Loan Estimate and the Closing Disclosure is based on the actual, non-rounded estimate that would have been disclosed on the Loan Estimate under § 1026.37(h) if it had been shown to two decimal places rather than a whole dollar amount. For example, if the “Loan Estimate” amount of “Total Closing Costs” disclosed under § 1026.38(i)(1)(i) is $12,500, and the “Final” amount of “Total Closing Costs” disclosed under § 1026.38(i)(1)(ii) is $12,500.35, then even though the table would appear to show a $0.35 increase in “Total Closing Costs,” no statement of such increase is given under § 1026.38(i)(1)(iii) so long as the actual, non-rounded estimate (i.e., the estimated amount of “Total Closing Costs” that would have been shown on the Loan Estimate to two decimal places) is equal to $12,500.35.

[Author]

Posts