For in-house loans, the bank does not charge the customer for the credit report. Since the GFE is to encompass fees typically charged to the borrower - would the credit report fee even be listed on the GFE?

I thought the rep from HUD during their phone conference stated that if a fee is waived from the beginning then it would not need to be listed on the GFE?

In addition, the bank on occasion will perform an in-house evaluation for which the borrower is not charged. So once again, would the appraisal fee not be listed on the GFE in this situation?

Thanks!

You have to pay for the credit report whether you charge the applicant or not so the fee is not "waived", it's a fee paid by the lender and would have to be shown on the GFE.

If you do not charge for an in-house appraisal then there is no fee to be disclosed, the same would be true if you waived your underwriting fee.

Valley Girl...we had similar questions ... we often pay some typical borrower costs....it seems that these must be disclosed, but you can issue a credit in box 2.

our follow up question, since you can't have both a credit and a charge (points) in the same transaction, is how do you handle the big picture. One of the posters submitted a question to HUD...hopefully its response will clear up this section of the GFE.

Good question layers. We've all been pondering this. I think the answer is to net them (off of the GFE) and then list the net in Block 2.

BTW - Does anyone KNOW the price of a credit report upfront these days? I'm not tallking about the $35 "Investigative" or Tri-Merge report, I'm talking the run of the mill Experian, Equifax or TransUnion report especially when they have tiered pricing based on volume - so you won't know until you get the bill about 45 days later.

Believe it or not, ours appear to average less than $5 each!! These are ordered from Experian. We don't get credit scores and I think that would be an extra cost.

The less than $5.00 does not surprise me. That is the reason that most lenders don't charge for a credit report for car loans, credit cards, etc. And many lenders order the same report for a mortgage or home equity loan that they would order for an auto or personal loan.

Typically, the CRA's will provide price breaks after the number of credit reports ordered reaches certain tiers. So if you order 50 or less in the month, each report may cost you $4.75, but if you order 70, then they only charge $4.50 for reports 51-70, and so on. You won't know what the bill is until after you get it, and since you have no idea what the total volume is on the bill (other departments order credit reports too), you're kind of stuck unless you want to figure the amount at your highest cost tier.

OR your lowest cost tier since you may be held to refund any overages on your lender credit for third party fees.

I'm dizzy now.......

I know that this is true (disclosing the payment of the credit report fee when "eaten" by the bank)....but I need help finding the reg citation. Any help is much appreciated. Thanks!

Review Appendix A and C.

From Appendix A (1/1/10):

Charges paid outside of settlement by the borrower, seller, loan originator, real estate agent, or any other person, must be included on the HUD-1 but marked "P.O.C." for "Paid Outside of Closing" (settlement) and must not be included in computing totals.

Appendix C (1/1/10)

. . . In the case of "no cost" loans where "no cost" encompasses third party fees as well as the upfront payment to the loan originator, all of the third party fees listed in Block 3 through Block 11 to be paid for by the loan originator (or borrower, if any) must be itemized and listed on the GFE. . . .

Thanks so much! I just spoke with my regulator and he is under the impression that POC's are basically gone, and that they shouldn't be disclosed (he's basing that off of the FAQs, page 6-7 question # 13). So now I am very confused....

POCs are still very much a part of the HUD Settlement Statement but they are no longer a part of the GFE. For those fees that were shown as POC on the current GFE will now be shown as a credit in Block 2 of the new GFE; which I personally think is asinine because our waived fees on our home equity loans have nothing to to do with the rate whatsoever. They are waived as a competitive measure to compete with local competition.

So we would list the credit report fee in box 2 under credit to reduce the origination charge, then also list it in box 3 as a charge, essentially "washing" so that everything is disclosed and matches the HUD 1/1A? (I hope that made sense.)

Dan-

My question is regarding Fixed Home Equity loans in which we also absorb all third-party fees and assess an $100 origination fee to the borrower. My question is this: what if our third-party costs rise between the GFE and the HUD-1A? It won't impact the borrower but they will still be looking at the tolerance which could increase by 10%. Should we disclose on the high-side to eliminate the confusion and getting the customer all excited about a refund (to which they aren't entitled and won't receive)?

We are having problems with our Laser pro system. For no cost loans, The new GFE works fine cause you no longer show the item as POC, and witht he credit in block 2 the GFE show No Cost to the consumer, YAY!

But if we let the items tranfer over to the HUD as is, it is fine. However, if we mark the items as POC (that typically were marked POC before), then we end up owing money to the consumer.

My question is, do we have to show the items as POC on the HUD? The end result is the consumer is not paying anything.

DD Regs,
I'm looking at the same thing on LaserPro. I changed them all to cash instead of P.O.C. which removes the refund to borrower and makes your HUD balance, but it makes it look VERY confusing on the disbursement request, because the disbursement request doesn't show the offseting credit to balance it out. I feel like I'm doing somethin wrong even though I'm being told it's the way it should look?

Chris

I am thinking of showing the charges then off set them with the credit so the consumer pays nothing. Does it really matter if the item was POC. It is being paid by us, that is what the credit is showing, does it matter when, as long as the consumer was propperly disclosed and did not pay for any of the services?

Is it necessary to reflect a credit in Box 2 if we do not intend for the borrower to pay any of the fees that are required to be disclosed? For example, we do not charge the borrower for the credit report fee, the bank will pay that fee. It is a required service, so we disclose the fee in Box 3. But do we have to show a credit in Box 2, or do we simply show on the HUD-1 that this fee is POC by lender?

That was my other thought, we list them in box 3 as POC. And for those items that are POC, we subtract from the credit we give in box 2. So the final ends up being $0.

Does this makes since?

You cannot show POC on the GFE, only on the HUD-1.

I know that, :duh, smacks head: I am getting my HUD1/1a and GFE confused right now.

What I am trying to ask is, if you show a loan as No cost on the GFE then you can't show any items as POC on the HUD because you then end up owing money to the borrower, instead of just coming out $0.

Not that I've tried to think this thru, but wouldn't you list the fees on the GFE even for a no-cost loan, with a credit in Box 2? Then you would also list these same fees on the HUD-1 as POC lender. Am I missing something here?

Yes, cause the Credit you show on the GFE would then come over onto the HUD line 802. The items that you showed a charge for on the GFE, when transferred to the HUD as POC, do not come out of that credit when shown on the HUD and therefore causes a Credit that needs to be given to the borrower.

The only way to make it come out $0 on the HUD would be to lower the credit on line 802.

Which is why I asked if it is necessary to show a credit in Box 2 for the fees the bank will waive or not collect from the borrower.

On the question of Laser Pro....how do you get your flood fee to get broken out properly so that only the LOL monitoring portion gets thrown into prepaid on the TIL? You only enter "Flood Determination" once as line 807 and you have to choose there whether to enter it as prepaid or security interest paid to others. Anybody know what i am talking about?

Why would you list those items as POC since they are being paid from the closing proceeds?? Wouldn't 803 be a negative, which should be enough to cover whatever lines you are paying?