The loan department is asking me about implementing a no closing cost bi-weekly loan. We currently offer a bi-weekly loan so that is not big deal. My questions are regarding the settlement statement and finance charges.

#1 Charges paid by the bank for the no closing cost loan, such as title, appraisal, flood, recording, etc... are listed as P.O.C and should not be included in the computing totals... right?

#2 What about fees that normally effect the APR... such as flood LOL fee? How are they handled?

Thanks!

1. Correct.

2. They are still disclosed (as POCs), you just do not calculate them into the APR. If the borrower does not pay them, they are not finance charges.

Thanks Dan!