I think all of these changes have taken any sense of logic I had....

So would it be line 801 or we include with the title services in that scenario? I apologize if it should be obvious...
Also, in Massachusetts, the seller typically pays all transfer tax (I can't find where it's a "law") so are we exempt from disclosing transfer taxes?

Thank you.

Question, if at the time of application, the applicant has a signed purchase agreement that states clearly what items the seller is paying. Why would we still show them as an expense to the borrower when we have a document that shows it is not going to be due to them?

David-I agree with you that that is how it should be done, but from the 10/23 HUD FAQ's- (page 9-first question under Seller paid items):

Q: If at the time a GFE issued it is known that the seller will pay settlement charges typically paid by the borrower, how are the charges disclosed on the GFE?
A; All charges typically paid by the borrower must be disclosed on the GFE regardless of whether the charges will be paid for by the borrower, the seller or other party.

Carter's Mom,

Laser pro is calculating 1/2 like on the pre til. It is also saying no balloon. On a 12 month interest only construction loan, it looks like 12 payments of 1/2 interest would pay it off...very confusing for the customer. Laser Pro is looking in to whether this is compliant.

I would like to bring up preapprovals again. I think Dave summarized the issue well. However, what can banks do? Can we have a preapproval for Reg. B purposes (verification documentation requested from consumer and approval given) but still not have an application for RESPA (since no property address was received)?

I know RESPA says you can't require verification documentation for the GFE to be given but could you still require it in the case of a preapproval?

Would the same line of thinking apply to charges paid by lender? For example, the only fee "typically paid" by the borrower for a home equity line product is an origination fee. All other fees associated with the transaction are absorbed by the lender. The questions in the Q&A's that address fees paid by seller or other third party seem to indicate that lender-paid fees be reflected on the GFE and HUD with a credit being given. To have to disclose fees that a borrower will not have to pay for "shopping" purposes seems like it would be confusing to the borrower. The only time the borrower is required to pay third party fees is if the lender has paid the fees on behalf of the borrower within the preceding 3 years.

David I completely agree. If a contract is specific with an amount or specific fee the seller is agreeing to pay, it should be noted as such. The current GFE allows a lender to list costs and take out those paid by others. If their intent was to make sure lenders were consistent with fees and terms, they should have simply "freshend up" the GFE and enforced current regulations.

I know we run the risk of having seemingly higher costs if we don't reflect the seller paids and the guy down the street does. However, if the intent of this is to allow borrowers to shop and compare apples to apples, it seems to me that they want worst case scenario disclosed by all lenders and if one does and one doesn't it defeats the purpose. JMHO

We are struggling with the same question. If we continue to do preapprovals based on borrower provided documentation, will we somehow violate RESPA?

I disagree about the subject of the sales contract when it lists seller paying up to 3% closing costs, etc. It seems clear (as mud) that HUD intends for us to list everything...regardless...that a buyer "might" pay. I wonder if this is because it's typical for the sales price to be adjusted by said "3%" to cover the seller's cost and this was intended to give the buyer an idea of the real deal?

Who knows.

I figure you show everything, then provide a means for the buyer to know how much of that the seller will actually pay. It's similar to the falacy that they didn't include a space for the total PITI to be shown. Many, many problems with the form.

One I found earlier will affect our construction loans. Often they are done at P+ and can change DAILY...The wording on the GFE doesn't really afford us a way to state that. It could have, but instead they say "The first change will be in...." well, you could say in "one" day, I suppose, buy that sounds like it WILL change and it may NEVER change...not friendly for in-house lending...period.