It is common practice in our lending area that the Sellers pay the docs stamps on the deed and for the Owners Title Ins Policy. We were originally told these needed to be shown on our GFE with an offset on page 1 of the HUD (this greatly inflated the borrowers costs on the GFE) In reading the FAQ's dated 1/28/10 page 11 it appears we no longer need to show these on the GFE. Am I interpreting this correctly?

Sorry Sunshine, I don't think so.

Unfortunately we are stuck with the giving the borrower a GFE that does not represent costs that they will actually incur. The only exception for not listing the Transfer Taxes and Owners Title Policy on the new GFE is if it was a state or local law that required the seller pay for those items. We were told by HUD that ‘common practice” and the “the purchase contract states the seller will pay” does not make it a state or local law.

You need to read further – page 30

2) Q: If a seller typically pays for the Block 5, Owner‘s title insurance, does the charge still have to be shown on the GFE?
A: Yes, an estimate of the cost must be shown in Block 5, Owner‘s title insurance for all purchase transactions regardless of who is selecting or paying for it.

If you issue the initial fees worksheet with a lump seller paid costs at the bottom (like on the old GFE) since you cannot designate it as seller paid, wouldnt that help to reflect what the buyers bottom line would be?

We are giving our customers a "standard cost sheet" so they can see their actual fees. Our cost sheet does not include the fees for Blocks 5 and 8 since they will be paid by the seller.