Did you know… that the Consumer Financial Protection Bureau (“CFPB”) made a typographical error regarding the calculation of tolerance limits?
On February 10, 2016, the CFPB published a correction to The Supplementary Information to the TILA–RESPA Final Rule (“2013 Supp. Information”) in the Federal Register. Many of you have heard of tolerances or have seen tolerance cures on your client’s settlement statements. The tolerance cure appears because there are certain charges that cannot change, or can only change by 10% in the aggregate, from the loan estimate given to a borrower shortly after applying for the loan to the final closing disclosure at settlement. It turns out that the 2013 Supp. Information left out a small, yet important, word when describing the charges that would and would not be subject to a tolerance. The 2013 Supp. Information stated that property insurance premiums, property taxes, homeowner’s association dues, condominium fees, and cooperative fees ‘‘are subject to tolerances’’. It should have read and now has been corrected to read that those charges ‘‘are NOT subject to tolerances.’’
Sometimes one little word can make a big difference!