We have a closing later this morning and I have a question relating to transfer taxes disclosure and tolerances.

We disclosed deed transfer ($3000)and recordation fees ($2000)of $5,000 and properly diplayed them in line 8 of the GFE. At that time we did not have the sales contract and since Florida does not require sellers to pay the deed transfer, we included it in the borrower's GFE totals.

The final HUD is showing the total of $5275 for all transfer tax related items, thus indicating a $275 tolerance cure required by the bank. The actual split however involves the seller paying the Deed Transfer taxes of $3000 while the borrower is paying the recordation fees of $2275 (the loan amount changed near the end of the processing cycle and we did not re-disclose).

Question: While we did underestimate the total transfer taxes by $275, the reality is the seller is paying $3000 and our borrower is paying far less than we disclosed.

Are we still required to cure the total by $275?

Regards,

You chose not to redisclose under a qualify changed circumstance, therefore you have to live with the charges disclosed.

The tolerance applies regardless who pays the charges.

Thanks Dan. Not the answer I was hoping to hear but I do appreciate your response. That is how we will proceed.

FWIW, I agree with Dan. Train and go on!

Ok, sorry, its me again on transfer taxes. What if you overdisclose the transfer taxes on the GFE. Are you allowed to put the actual amount on the HUD in line 1203 since it is going down? I thought it was suppose to flow from the GFE-zero tolerance.

Example $800 on GFE actual fee is $675 sellers cost. Can we show 1203 as $675 and in the 200 series show a credit and in the 500 sellers series show the $675 cost?

Having the actual be less is always ok. Zero tolerance means it cannot increase. No credit required on the HUD.

Thanks for your help.

I do want to clairify one more thing about this. We do have to move it to the sellers column, right?

We would show the $675 in the borrowers column on line 1203 and then in the 200 and 500 series move it to the seller or are you saying that is not necessary either?

Rather than start another thread, can I jump in here?

I am not sure I am understanding this. We disclosed $0 in transfer taxes on the GFE and IL does not have a law. Line 1203 shows $130 in the seller's column. On page 3, comparison chart, the transfer tax line is blank.

Is this correct? The seller paid the $130 transfer tax fee.

Whether this is right or not, it is my understanding that even if you have $0 in the transfer tax box on the GFE, you still have to show the actual amount of transfer tax paid in the transaction in line 1203. Since transfer tax is a GFE disclosed fee, it needs to be shown in teh borrower's column in line 1203. If the seller is actually paying all or a portion of the transfer tax, the amount the seller pays needs to be included with any other seller-paid GFE fees in a lump sum credit to the borrower in the 200 series on page 1 of the HUD-1 and a charge to the seller in the 500 series on page 1 of the HUD-1. Then, on the 3rd page, the transfer tax would be in teh 0% tolerance box showing the comparison from the GFE ($0) and the HUD ($130). Does that make sense?

looks like rockchalk has it right. You will be out of tolerance by not disclosing it and by the state of IL not requiring the seller to pay it.

I followed you all the way to this point:
"Then, on the 3rd page, the transfer tax would be in teh 0% tolerance box showing the comparison from the GFE ($0) and the HUD ($130). Does that make sense?"

Are you saying the GFE says $0 (correctly) or are you using my example? Should the GFE show the amount of transfer tax so the comparison chart on pg 3 will show GFE ($130) HUD ($130)- even though you offset it on page 1?

You didn't disclose it on the GFE, right? If so, you will show $0 for the GFE on page 3 and $130 in the HUD column. YOur reimbursement will be $130.00

Ok - so he was basing that statement off my example and the CORRECT way to do it is to show the transfer tax on the GFE EVEN if the borrower is NOT paying it because IL does not have a law saying otherwise, correct? (Thanks for your patience - I am second guessing myself on this!)

that's right, SkiDoo.

Thanks RR Joker!!

Thanks RR Joker!!

(she's overly excited about this!)