A loan was made to purchase and improve a primary residence and the seller paid all the fees (no points were charged) Would that eliminate the HOEPA test? The APR would not be affected by the seller paid fees.

We use Laser Pro and, for this particular loan, the HOEPA test was not done. We just want to be sure we understand why it did not test.

The APR would not be affected by the seller paid fees.


That depends whether the seller was legally obligated to the bank to pay the fees or if they simply paid the fees on behalf of the buyer. If the latter then they are borrower paid fees and must be disclosed as such.

Okay, I see what you're saying about the effect on the APR if the borrower pays the fees on behalf of the borrower; which was the case. So, we will have to figure out how to load this in Laser Pro to make it test for HOEPA. Right?

I have no idea about Laser Pro but the fees are borrower paid fees and you have to treat them as such in your calculations.

Think of them this way: The borrower pays them and receives a credit from the seller in the same amount at closing.

We show them as fees paid by the borrow in cash on Laser Pro. That way they are still figured into the calculations, but not added to the loan.