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#1353114 - 03/05/10 04:39 PM GFE - Bank portfolio loans
Arizona Offline
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We cover all closing costs in our loan amount. We need to clarify how to reflect on GFE. Do we need to show a credit in box 2 for costs or not? It was our understanding that a no-cost loan would give credit but this may just be for secondary market loans. Please help clarify for us.

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Lending Compliance
#1353123 - 03/05/10 04:46 PM Re: GFE - Bank portfolio loans Arizona
David Dickinson Offline
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David Dickinson
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Central City, NE
RESPA requires you to list all settlement fees on the GFE. If the bank is covering them, you show a credit in Block 2.
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#1353124 - 03/05/10 04:46 PM Re: GFE - Bank portfolio loans Arizona
Dan Persfull Online
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Dan Persfull
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Bloomington, IN
RESPA rules apply equally to portfolio and 2ndary market loans.

You have to show the appropriate credits if applicable.

Quote:
We cover all closing costs in our loan amount.


This would not be a no cost loan. You are simply financing the closing costs.
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#1353172 - 03/05/10 05:33 PM Re: GFE - Bank portfolio loans Dan Persfull
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Dan- when you refer to credit, it is block 2 or HUD1 200 series credit?

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#1353200 - 03/05/10 05:57 PM Re: GFE - Bank portfolio loans Arizona
Dan Persfull Online
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Dan Persfull
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Bloomington, IN
For partial or no cost loans then as David said the credit is to be shown in Block 2 to offset the charge.
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#1353814 - 03/08/10 06:05 PM Re: GFE - Bank portfolio loans Dan Persfull
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When it comes to HUD1 there is a cash back to the borrower when you include the fees in your loan amount and give them a credit on GFE Block 2. I'm not sure what we may be doing wrong, does anyone have a sample of GFE/HUD1 comparison for In house portfolio loan where the loan amount covers all closing costs including origination? It would work out fine if you had open-ended loan where you disburse only the commitment amount.

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#1353934 - 03/08/10 08:08 PM Re: GFE - Bank portfolio loans Arizona
Dan Persfull Online
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Dan Persfull
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Bloomington, IN
It has to be in your software set up. If Block 1 is $1000 and Blocks 3 - 11 are $2500 then you should be showing a $3500 credit in Block 2, providing you're paying all charges shown in Blocks 3 - 11.

GFE Page 2

Block 1 $1000
Block 2($3500)
Block A ($2500)
Blocks 3 - 11 $2500.00
Block A + B $0.00

GFE Page 1 (Summary of settlement charges)

Block A($2500)
Block B $2500
A+B $0.00


However, " when you include the fees in your loan amount and give them a credit on GFE Block 2"

If you are financing the fees then this is not a no cost loan and the GFE would not show any credits in Block 2. You are simply financing the fees, you are not paying/waiving them.



If you are actually paying the charges then you don't want to show them being financed, you will want to show them being paid by cash. At least that's how our software works.
Last edited by Dan Persfull; 03/08/10 08:11 PM. Reason: Add additional comment.
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#1353942 - 03/08/10 08:17 PM Re: GFE - Bank portfolio loans Dan Persfull
RR Joker Offline
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RR Joker
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The Swamp
Dan, I'm so glad you answered that...I read it and apparently couldn't see the forest for the trees (financed AND Paid by lender) egads!
Last edited by RR joker; 03/08/10 08:18 PM.
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