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#1351488 - 03/03/10 03:31 PM RESPA - CLO fees
VRV Offline
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Joined: Jun 2007
Posts: 173
I need to have an answer to this in the next half hour, so I don't have time to read through all the RESPA postings. Please forgive me if this question is already answered somewhere. If it is, and you can refer me to the location of the info, that would be great too.

We are entering into a relationship with online aggregators like LendingTree where we will be paying the entity a fee for each lead as well as a closed loan fee for each lead that ends up in a closed loan. The Bank will always be paying these fees directly to the aggregator--the borrower will never pay any of it.

Also, we are going to use an intermediary agent to assist us with taking the applications and getting the loans closed. We will be paying them a fee for each closed loan as well. Again, no cost will be passed on the borrower.

Can anyone tell me how (or even if) these fees need to be disclosed on the GFE and HUD? Thank you so much. Sorry for the urgency.

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#1351525 - 03/03/10 04:24 PM Re: RESPA - CLO fees VRV
RR Joker Offline
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Posts: 20,654
The Swamp
yeah, they will be block 1 fees...but I'm not sure how Lending Tree is earning a fee?
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#1351531 - 03/03/10 04:27 PM Re: RESPA - CLO fees VRV
OldSchoolBanker Offline
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Joined: May 2005
Posts: 660
FL
I am not a board expert, but am willing to share my opinion. I searched the FAQ's and did not see a hit on CLO. Thinking it through, it is a cost of origination similar to a mortgage broker fee and might be handled similarly. You would add it to line 1 Origination Charge and credit it in box 2 of the GFE.
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#1351591 - 03/03/10 05:10 PM Re: RESPA - CLO fees OldSchoolBanker
VRV Offline
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Joined: Jun 2007
Posts: 173
Thanks for your responses.

It does seem like including it in Line #1 under Origination Fee is the best option. The only amount we include there now is the amount of the Loan Fee ($150) the borrower pays to us. If we include this Lending Tree fee in Line #1, we will need to add that amount to the amount of the credit in Line #2 in order to keep the borrower from paying it. Does that make sense?

With respect to the fee we are paying to the intermediary for processing services, I believe we will include that in Block #3 (Required Services that we select)and then also add that amount into the credit amount on Line #2 so the borrower won't end up paying it.

But we won't know exactly how much we will be paying the intermediary for their processing services at the time we do the GFE. (The amount they are paid per loan depends on the volume of loans in the month--the more the loans, the lower the amount per loan.) Since we won't know the exact amount at the time we do the GFE, or possibly even when we do the HUD, should we just use the highest possible dollar amount here? Then we would use that same figure in the credit portion so the borrower isn't impacted?

RR, to answer your question,our Legal Department vetted the Lending Tree fee issue and does have some concerns under Section 8, but the decision was made to proceed anyway.

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#1351883 - 03/03/10 09:12 PM Re: RESPA - CLO fees VRV
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
I agree with para 1 above.

I don't agree with para 2 above. That's still part of the origination services.

YOu could use the highest possible, or once you have a track record, you may be able to do an average cost.

As to para 4...I have concerns with your Section 8 issues as well.
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My opinion only. Not legal advice.

Say you'll haunt me - Stone Sour

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