We noticed that on some of our loans the monthly payment stated on the TIL is correct however the Note monthly payment is incorrect. The difference in the payments is a penny (the Note being higher than the TIL). The borrower has been making the payment that is listed on the Note as that is how the loan is being serviced.

Is there a requirement to remediate these loans by correcting the Note and asking the borrowers to resign? In addition, would the borrowers be owed the penny for each month they've paid? I don't know if this makes a difference, but if the borrower was to payoff, the correct balance would be owed and the borrower would not have paid anymore than they should or if the loan went full term the last payment would account for the penny difference.

1026.17(c)(3) For TIL

(3) The creditor may disregard the effects of the following in making calculations and disclosures.

(i) That payments must be collected in whole cents.

(ii) That dates of scheduled payments and advances may be changed because the scheduled date is not a business day.

(iii) That months have different numbers of days.

(iv) The occurrence of leap year.

Impossible. The note is your contract & the payments stated therein are what you should collect. The TIL must be based on the note and if the TIL says something else, it is wrong.

We are collecting what is stated on the Note however, when you do the calculation it is off by a penny. The TIL is stating the correct payment. The documents are pulling the payment from two different areas of our loan origination system. I am being advised that we need to remediate by requesting a new Note be signed reflecting the correct payment and refund the difference, I'm just not sure if I agree.

Regardless of how it was calculated (right or wrong), you must collect what the note says. The problem you have identified will have a tiny impact on the amortization of the loan--certainly not enough to necessitate a rewrite of the note. Reading the note, you will most likely find language calling for payments of the stated amount until all principal, interest, and other amounts due have been paid in full. Following that prescription, you will not overcharge the customer.

If we were to continue to collect the payments on the Note and now the TIL is considered wrong, would remediation of the TIL be nescessary? Would this re-open rescission period?

Cite the list of violations that have resulted from this error.