I understand that taxes should not be disclosed on the GFE, however, how is your bank disclosing property taxes in the following situations?
1. The customer is purchasing a house. 2. The customer is refinancing their home. 3. The customer is refinancing their home where the 1st half of the taxes are currently due and the first payment isn't until after the taxes are due.
We currently disclose taxes in the 900 series (POC Borrower)and in the 1300 series when they are due before the first payment is to be made.
I've read a few posts that contradict our assumption of disclosing taxes in the 900 series as it doesn't meet the definition of a settlement service in 3500.2 . However, I see 3500.2(13) mentions the service involving real estate taxes. Can someone tell me how taxes does not meet the definition of a settlement service?
Property taxes are not a settlement charge. Taxes would have to be paid whether this involves a loan or not. If they don't belong on page 1, why are their specific lines designated for them? I'm sure that it is the instructions to the HUD-1 for those line items.
The opinions expressed are my own, take them or leave them.
I agree that the taxes go in the series rlcarey has noted above in a purchase transaction. However, our lenders like to list the taxes as POC in the 900 series in a refinance transaction. Where are others listing the taxes in a refinance.
Randy, they are probably an FDIC-Chicago regulated institution that is trying to follow CHIRO Bulletin 14-2005, which instructed their banks to disclose real estate taxes on the GFE and HUD as a POC item.
The reason I'm bringing this back up is that I had a discussion with an FDIC examiner recently who said that they are still following that bulletin, even though it is 7 years old and you can't do POC items on the GFE. Taxes do not meet the definition of a settlement charge and unless you are doing pro-rated taxes as part of a purchase, escrowing, or paying delinquent (disbursement), they have no place on the HUD. I'm trying to get more information on this. This opinion only exists to my knowledge in the Chicago region of FDIC...