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#1344581 - 02/17/10 05:15 PM Reg Z-Flood Cert Fee
Black66 Offline
Junior Member
Joined: Jul 2009
Posts: 39
PA
We pay the Flood Cert Fee (life of loan) and do not charge the customer, making it an expense to the bank. The way it is now being listed on my loan doc is as a Prepaid Finance Charge causing it to impact the APR and Amt Financed.

I think there has to be some step we are missing, since the customer does not pay this. Do we need to include the fee in the amount financed and apr as a prepaid finance charge?

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Lending Compliance
#1345053 - 02/18/10 03:37 AM Re: Reg Z-Flood Cert Fee Black66
jlroberts Offline
Diamond Poster
jlroberts
Joined: Sep 2009
Posts: 1,601
Ohio
It no longer matters that banks do not charge the borrower for items such as the flood cert or credit report, we are required to disclose the cost to the borrower in Block 3 / HUD 805 and 807. The lender can then give a credit to the borrower for the fee. Say the flood cert fee is $15, Block 3/HUD 807 would show $15 and then Block 2 / HUD 802 would show a credit for ($15). The net is -0- charged to the borrower so -0- amount to use in APR calc.

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#1345134 - 02/18/10 02:14 PM Re: Reg Z-Flood Cert Fee jlroberts
Black66 Offline
Junior Member
Joined: Jul 2009
Posts: 39
PA
Thank you for your response. My concern, though, is not related to HUD or GFE. We do disclosed the fee there. My question is whether the Flood Cert Fee (life of loan)should be included in the APR according to Reg Z.

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#1345146 - 02/18/10 02:28 PM Re: Reg Z-Flood Cert Fee Black66
Frank Offline
100 Club
Joined: Jun 2007
Posts: 133
Central Arkansas
LOL is a finance charge. It's found in the commentary at 4(c)(7).

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#1345154 - 02/18/10 02:35 PM Re: Reg Z-Flood Cert Fee Frank
Black66 Offline
Junior Member
Joined: Jul 2009
Posts: 39
PA
I understand that LOL is a finance charge if it is applied to the customer. We do not actually charge our customers this fee.

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#1345192 - 02/18/10 03:01 PM Re: Reg Z-Flood Cert Fee Black66
~MunQue~ Offline
Platinum Poster
~MunQue~
Joined: Jul 2006
Posts: 718
HERE! I'm here!
The LOL should not affect the APR because no fee is passed on to the customer, your disclosing it correctly on the GFE and HUD, however those are RESPA and APR is Reg Z, so if your software doesn't figure that out for you, you may have to go in there manually and tell it not to affect the APR, We had this problem too, but fortunately for us it's as simply as checking a box.
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#1345211 - 02/18/10 03:22 PM Re: Reg Z-Flood Cert Fee ~MunQue~
Black66 Offline
Junior Member
Joined: Jul 2009
Posts: 39
PA
Thank you. That was helpful

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