Re: Curing a mistake on the Hud 1


Of the fees listed in your question only the portion of the total fee that is for preparing documents for the bank, such as the mortgage, must be included in Block 1/line 801 of the GFE and the HUD-1. Regulation X provides that a violation may be cured at closing or within 30 days after closing. Beyond the 30 day period refunding fees to the customer does not cure the violation; you still have legal liability. But refunding the excess fees may appease the examiner.

Moving forward, determine what portion of the total fee is for preparing documents for the bank and properly disclose that item. For the loans disclosed in error in the past, consider refunding the document preparation portion. This action should be taken for all loans upon which the error occurred. Provide the consumer with a revised HUD-1, reflecting the refund. The manual provided at the seminar includes examples of the two methods that may be used to reflect the correction.