Q: Do creditors need to provide corrected Closing Disclosures when they cure tolerance violations?
A: Yes. If the creditor cures a tolerance violation by providing a reimbursement to the consumer, the creditor must deliver or place in the mail a corrected Closing Disclosure that reflects the reimbursement no later than 60 calendar days after consummation. (§ 1026.19(f)(2)(v)). See additional discussion above in section 12.6 of this Guide.
Depending on how the cure for the tolerance violation is provided, additional disclosures may apply. If the creditor is providing the cure for the tolerance violation in the form of a principal reduction, the creditor will need to provide the accompanying principal reduction disclosures. (§§ 1026.38(e)(2)(iii)(A)(3) and 38(i)(1)(iii)(A)(3); Comment 38-4). If the creditor is providing the cure for the tolerance violation in the form of a lender credit, the creditor will need to disclose the credit within the Lender Credits disclosure in the closing costs totals section, along with a statement that such amount of Lender Credits includes a credit for an amount that exceeds legal limits. (§§ 1026.38(e)(2)(iii)(A)(3) and 38(i)(1)(iii)(A)(3); Comment 38(h)(3)-2). See the TILA-RESPA Guide to Forms for more information about how to make these disclosures.