Block 10 has three pieces of data entry and a total for the borrower's column.

• Amount of interest per day
• Number of days of interest to be paid based on the settlement date
• The settlement date

It is my understanding that the "number of days" is number of days left in the month after the date of proposed settlement.

Here, the Mortgage Manager says "we always use 15 days" since it's an estimate and is not a 10% tolerance item. But then the settlement date entered is typically NOT 15 days before the end of the month. Therefore, the math doesn't check out.

Example:
"This amount is $1.50 per day for 15 days (if your settlement is 9-25-14)."

So either the number of days or the proposed settlement date in the example is incorrect. Based on the settlement date of 9/25/14, the number of days is 6, not 15. Or if 15 days is to be used the the proposed settlement date has to be 9/16/14.

The Mortgage Manager is arguing that there is no violation or mistake present in the example of above. I maintain that if it's wrong and doesn't make sense, it's a violation.

Am I right?

Block 10, “ Daily interest charges. ”—In this block, the loan originator must estimate the total amount that will be due at settlement for the daily interest on the loan from the date of settlement until the first day of the first period covered by scheduled mortgage payments. The loan originator must also indicate how this total amount is calculated by providing the amount of the interest charges per day and the number of days used in the calculation, based on a stated projected closing date.


This section of Appendix C seems to back up what I'm saying in that the number of days used in the calculation is based on a stated projected closing date.

I agree with you. You shouldn't always put 15 days in Block 10. You should predict a closing date, how many odd days there will be and calculate accordingly. Yes, it's a zero tolerance issue, but that doesn't mean the GFE should be based on your best estimate.

Yes, it's a zero tolerance issue, but that doesn't mean the GFE should be based on your best estimate.

Yes, it's a unlimited tolerance issue, but that doesn't mean the GFE should not be based on your best estimate.


Fixed

The closing date is an estimated date based on known information at the time the GFE is prepared. If we have a purchase agreement with an estimated closing date that date should be used. If there is no closing date stated (such as a refinancing) then depending on the circumstance we currently use 15 to 30 days from the date of the application as the estimated closing date.

And so then, you have to figure the number of odd days based on that 15 to 30 day future date. You can't just calculate 15 days of interest if the closing date isn't 15 days before the end of the month....right? That's what our mortgage manager thinks is OK. The Mortgage Department indicates a proposed closing date but then calculates 15 days of interest regardless of what the date is.

And thanks, Randy. I knew what David meant, however.

The Mortgage Department indicates a proposed closing date but then calculates 15 days of interest regardless of what the date is.

That would not be correct.

And finally....the Mortgage Manager insists that though it might be incorrect, as far as the date and number of days not jiving, it's an estimate and so there is no RESPA violation. I maintain that if ANYTHING is disclosed incorrectly on a RESPA mandated document, a RESPA error exists.

Are there any instances where you would not calculate the number of odd days interest on the GFE or where it would be $0?

Only if you don't collect odd days.

Not even then. You still have a daily interest. It's just zero days and zero charge.

That would be the case if the estimated closing date (based on the best available information at the time of the GFE issuance) is on the 1st of the month and the first payment date is the following 1st of the month.