Tolerance Cure: A Lender Credit That Shows Up on a Revised CD
This tolerance-cure line card outlines required disclosures for lender credits listed on revised Closing Disclosure forms for residential mortgage loan transactions. It applies to all loans subject to TRID (TILA-RESPA Integrated Disclosure) rules where disclosed settlement service fees exceed allowed tolerance thresholds, requiring a lender to issue a credit to the borrower to cure the overage and meet federal disclosure requirements. The materials below are formatted to organize your closing file records, cross-reference lender disclosures, and confirm you receive the full credit amount you are owed prior to loan funding. This resource is for educational use only; always cross-check entries with your loan officer or licensed closing agent before signing final closing paperwork, and Margin Desk provides these resources as a non-binding organizational tool.
Revised CD Credit Entry Box
When a lender issues a revised Closing Disclosure to address a tolerance overage, the cure credit will appear in a standardized entry box on either page 2 or page 3 of the form, depending on how the lender chooses to allocate the adjustment. Most lenders list the credit explicitly on page 2, Section L: Payoffs and Payments, under a line labeled “Tolerance Cure Credit” or grouped with other lender-specific credits, with a corresponding reference number that links back to the overcharged fee line item from your original Loan Estimate (LE) or initial CD. If the credit is unlabeled or grouped with unrelated credits (such as a promotional rate buydown or referral incentive), you are within your rights to request a written breakdown of all lender credits from your loan officer within 3 business days of receiving the revised CD to confirm the exact portion allocated to tolerance cure. Per TRID rules, this credit cannot be applied to your required down payment unless you receive explicit written approval from both your lender and title agent, as down payment funds typically must come from your own verified assets. You should mark the location of the credit entry on your printed copy of the revised CD, and attach a sticky note with the corresponding overcharge line item for quick cross-reference during closing review.
Tolerance Cure Calculation Schedule
This schedule is designed to help you calculate the exact cure credit you are owed, cross-reference lender calculations, and track the status of each adjustment. All calculations align with federal TRID tolerance categories, which separate settlement fees into zero-tolerance (no overage allowed, full overage must be credited), 10% cumulative tolerance (sum of all fees in the bucket can exceed disclosed amounts by no more than 10%, any overage beyond that requires a credit), and no-tolerance (fees that can change freely, no cure required) buckets.
| Line Item | Original LE Disclosed Amount | Initial CD Charged Amount | Allowable Tolerance Threshold | Required Cure Credit Amount | Status Verification |
|---|---|---|---|---|---|
| 1. Origination Fee (Lender-Charged) | Illustrative example: $995 | Illustrative example: $1,125 | 0% (zero tolerance) | Illustrative example: $130 | Matched to revised CD entry |
| 2. Appraisal Fee (Third-Party, Lender-Selected) | Illustrative example: $575 | Illustrative example: $610 | 0% (zero tolerance) | Illustrative example: $35 | Awaiting revised CD confirmation |
| 3. Title Search Fee (Third-Party, Borrower-Selected from Approved Provider List) | Illustrative example: $325 | Illustrative example: $370 | 10% cumulative for bucket | Illustrative example: $12.50 | Calculation verified with title agent |
| 4. Recording Fee (Government-Charged) | Illustrative example: $215 | Illustrative example: $240 | 10% cumulative for bucket | Illustrative example: $0 (cumulative overage already covered by title search cure) | No additional credit required |
You can add additional rows as needed for other line items that fall outside allowed tolerance limits. If your lender’s proposed credit amount differs from your independent calculation, submit a copy of this schedule to your loan officer with a written request for explanation prior to your scheduled closing date.
Lender Credit Verification Note
This signed note serves as a formal record of your agreement with the lender regarding the tolerance cure credit, and protects you from last-minute credit adjustments or revocations prior to closing. The note should include the following required fields, and be signed by both you and an authorized representative of the lender: full loan number, full property address, and all borrower names as listed on your official loan disclosures; a line-by-line reference to each overcharged fee and the corresponding cure credit amount, pulled directly from your completed calculation schedule; explicit confirmation that the credit will be applied to your closing cost balance before any out-of-pocket funds are collected from you at the closing table; a statement confirming the credit is non-revocable unless you make a material change to your loan terms prior to closing; and signature lines with printed names, titles, and dates for both parties. You should retain one fully executed copy of this note in your personal mortgage closing file, provide one copy to your title agent for their closing records, and keep a digital scan stored in a secure cloud folder for easy access if future disputes arise. If the lender refuses to sign or provide a written verification note, you may request a delay of closing until the credit terms are confirmed in writing, per TRID timing and disclosure rules.
Line Item Adjustment Form
This form documents all changes to your closing cost line items between the issuance of your initial CD and revised CD, ensuring the tolerance cure is properly allocated and no unrelated adjustments are incorrectly applied to your credit. The form has three core sections: first, the Overage Identification section, where you list each overcharged fee, original disclosed amount, final charged amount, applicable tolerance category, and calculated overage amount; second, the Credit Allocation section, where you specify exactly how the cure credit is being applied (e.g., to closing cost balance, to prepaid escrow deposits for taxes and insurance, to principal reduction if permitted by your lender); third, the Disclosure Confirmation section, where you attest that you received the revised CD a minimum of 3 business days prior to your scheduled closing date, as required by federal law, and that you have reviewed all adjustments for accuracy. You must attach copies of your original LE, initial CD, and revised CD to this form, and file it alongside your signed lender credit verification note in your closing folder. If the credit is being split across multiple line items or expense categories, list each allocation explicitly on the form to avoid confusion with other closing cost adjustments, such as seller credits or price adjustments negotiated during your inspection period.
Cure Documentation Filing Coupon
This removable, wallet-sized coupon is designed to be attached to the front of your physical closing file folder to quickly identify that a tolerance cure is associated with your loan, and to provide key details for reference during closing or future record reviews. The coupon should include the following information: full 10-digit loan number, full property street address, total aggregate tolerance cure credit amount, date you received the revised CD, date you verified the credit with your lender, and a pre-printed check-off list of all supporting documents included in your file (calculation schedule, signed verification note, line item adjustment form, copies of all LE and CD versions). You can present this coupon to your closing agent at the start of your closing appointment to help them quickly locate the credit entry on your final closing paperwork and confirm it has been applied correctly. You should keep the coupon attached to your physical closing file for as long as you hold the mortgage, or a minimum of 7 years for tax and audit record-keeping requirements.
Before signing your final Closing Disclosure at the closing table, cross-reference the listed tolerance cure credit amount against your completed calculation schedule to confirm no discrepancies exist.
