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#1323732 - 01/13/10 05:39 PM VA Loan - Non Allowable Fees - HUD1
Mrs. Rizzo Offline
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Curled up by the fire...
I am having a hard time today, please forgive me.

Non allowable fees on VA loan - Do not go on GFE.
How are they listed on the HUD1? If the seller pays, does it go in the lump credit on page 1? Listed seperately on page 2? What if the broker is paying it?

I can't for the life of me, wrap my head around it.

Thank you so much in advance for your time and input.
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RESPA
#1323768 - 01/13/10 06:11 PM Re: VA Loan - Non Allowable Fees - HUD1 Mrs. Rizzo
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Rizz-what type of fees are you referring to?
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#1323790 - 01/13/10 06:18 PM Re: VA Loan - Non Allowable Fees - HUD1 TB 12
Mrs. Rizzo Offline
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Curled up by the fire...
The non-allowable fees on VA loans. They are fees that may not be charged to the borrower.
Generally, they are still charged in connection with the loan but either the seller or broker pays them.
It would be items like notary fees, termite inspections, tax service fees, underwriting, doc prep.
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#1324445 - 01/14/10 02:41 PM Re: VA Loan - Non Allowable Fees - HUD1 Mrs. Rizzo
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Bump
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#1324525 - 01/14/10 03:55 PM Re: VA Loan - Non Allowable Fees - HUD1 Mrs. Rizzo
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Interesting situation-I am not sure how you show that- we don't charge any party for those costs on VA (except the pest which shows on the seller side). Having said that, even though Vet can't pay those fees, they are being charged and collected in relation to the loan so I am almost tempted to say they would need to be on the initial GFE then on the HUD they would show as credits from the seller or broker. As HUD has made clear even fees that are "typically" paid by the seller need to be shown on the GFE. JMHO.
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#1328557 - 01/21/10 10:35 PM Re: VA Loan - Non Allowable Fees - HUD1 TB 12
RolTyde Offline
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I'm working on a VA purchase loan and am having the same issue. I understand HUD wants all costs typically paid by the borrower to be shown on the GFE. VA will not allow the borrower to pay these fees ever. My opinion is these aren't typically paid by the borrower and therefore shouldn't be on the GFE. My opinion means little or nothing of course. Has anyone else dealt with this issue yet and how are you handling it? Any thoughts are much appreciated.

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#1556837 - 05/25/11 10:13 PM Re: VA Loan - Non Allowable Fees - HUD1 RolTyde
OldSchoolBanker Offline
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I have searched and cannot locate a more current string on this issue.

On VA loans, do we disclose the fees typically paid by borrower (but not permissible as a VA loan) and then credit them back on the HUD-1 in the 200's? We would probably need to provide an itemization of the 200's credit to be sure the VA agrees with the credit.

Any specific feedback is appreciated.

Regards,
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#1556940 - 05/26/11 01:23 PM Re: VA Loan - Non Allowable Fees - HUD1 OldSchoolBanker
Jerod Moyer Offline
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If the VA program requires certain fees to be paid by the seller, those fees should not be included on the GFE.

RESPA states that fees typically paid by the seller as a matter of common practice should not be included on the GFE. In the case of VA loans, there are certain fees for which the borrower are not allowed to EVER pay based on the structure of the VA loan program.

Maybe this will help... The VA program is run by the government and they say who can and cannot pay what fees. Therefore, when you deal with this kind of loan there are certain fees the borrower will never pay - so don't disclose them.

By contrast other loan programs are more flexible and thus the purchase agreement by way of negotiation between the buyer and seller depicts who will pay what. In this scenario you should include all closing costs (for the most part) on the GFE regardless of what the purchase agreement states. The idea is that HUD does not want GFE's issued based on the buyer's negotiating skills. They want GFE's to apple to apple worst case scenarios.
Last edited by Jerod Moyer; 05/26/11 01:30 PM.
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#1557025 - 05/26/11 02:59 PM Re: VA Loan - Non Allowable Fees - HUD1 Jerod Moyer
OldSchoolBanker Offline
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Thank you for your response. Though the veteran cannot pay for certain costs, I do not think we should assume the seller is the only one to pay them. Also, the VA does not regulate RESPA so they are careful not to give GFE advice. My impression is that the lender often ends up paying for the costs.

Another example: Tax Service Fees cannot be paid by the veteran. I seriously doubt the seller will pay for it so the lender ends up paying for it. Is it shown as a fee on the GFE, then also shown on page 2 of the HUD-1 with a credit on page 1 of the HUD-1 in line 204?

Any other VA lenders care to chime in?

Thanks
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