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$200 Coupon for Mortgage Loan Closing Costs
Randy Carey, BOL Guru
Guru Bios
Question: The Bank has a mortgage loan promotion that consists of giving a coupon worth $200 off the mortgage loan closing cost, which means the Bank pays for some of the costs charged by the Appraiser. Must the $200 be designated on the GFE and the HUD-1 as POC or PBB?
Answer: I believe the coupon credit would be entered in the following area of the HUD-1 as it would be similar to a builder allowance - it's just an allowance by the bank for closing costs:
Lines 204-209 are used for other items paid by or on behalf of the Borrower. Examples include cases in which the Seller has taken a trade- in or other property from the Borrower in part payment for the property being sold. They may also be used in cases in which a Seller (typically a builder) is making an "allowance" to the Borrower for carpets or drapes which the Borrower is to purchase separately.
The appraisal fee would then not show as POC or PBB, which is not a valid abbreviation found in the HUD-1 instructions.
First published on BankersOnline.com 1/16/06
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