RESPA - Won't Show the Fees as POC
Answer by David Dickinson, BOL Guru Guru Bio
Question: I understand that costs associated with no fee loans are to be shown as POC on the HUD. It is our practice to include the cost of the title, escrow and recording fees to the escrow company with our funding wire (over fund the loan). I have an escrow officer that refuses to show the fees as POC unless we send her a separate check and she won't even accept a separate wire for these fees. Her belief is that the items are not truly POC and this would constitute a RESPA violation. Therefore, she will only show it as a lender credit. I cannot find any information that suggests that over funding a loan constitutes a RESPA violation. Is this a RESPA violation, and if so, can you please guide me to the appropriate Reg?
Answer: The first thing the escrow officer is missing is the requirement of RESPA to separately itemize all fees. Whether the fees in the funding are paid separately, they still exist. All fees must be listed.
Appendix A to 24 CFR 3500 states:
"The settlement agent shall complete the HUD-1 to itemize all charges imposed upon the Borrower and the Seller by the Lender and all sales commissions, whether to be paid at settlement or outside of settlement, and any other charges which either the Borrower or the Seller will pay for at settlement."
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