I apologize if this question has already been presented. It's sort of a Reg Z and RESPA question so I decided to post it here.

Seems our software copies line 801 from the Settlement Statement ("our origination charge") directly to the Regulation Z TIL as a PPFC and labeled as "our origination charge." I have a problem with this since all of the fees that make up the origination charge are not necessarily PPFCs....such as a doc prep fee. But is it OK to just across the board, disclose the total on line 801 (labeled "our origination charge") as a PPFC on the TIL? My doc prep department claims that's the only way that our software can do it.

Your APR will not be accurate.

Our Mortgage Center retained a legal firm to monitor their compliance when the new RESPA rules came into being. And those attorneys have the same opinion and state that it is "HUD's position" that the "our origination charge" must copy over into the Regulation Z TIL verbatim. I let that one go because those attorneys would "supposedly" come forward for support on an exam. But now, our in-bank software, LaserPro, is doing the same thing.....that is....unless the doc prep users just don't know how to enter the data to allow only the part of the origination fee that is a PPFC to show on the TIL.

But you're saying I'm NOT losing my mind? Regulation Z exempts doc prep and including it would over disclose the APR. Could we get into trouble for an over disclosure?

This is what my examiner told me....

In relation to the overall APR using an extra fee and becoming overstated, he would not cite as a violation since it shows as more "expensive" to the consumer and would not really be a bait and switch (like an understated APR that results in reimbursements).

In relation to MDIA, as long as the fee is treated the same in relation to the APR on both the ETIL and the final TIL and was within tolerance, there would be no issue either.

He did prefer that the APR be as accurate as possible, but he would not consider it a violation so long as it did not result in a reimbursale transaction or an MDIA tolerance issue between the ETIL and final TIL.

On what authority are they basing that opinion? They may come to bat for you but they are going to strike out. From the FAQs.

10) Q: Is Block 1 of the GFE a finance charge?
A: Portions of Block 1 may be "finance charges". However, Block 1 of the GFE is all compensation for all loan originators. A "finance charge" is defined in the Truth-in-Lending Act, regulated by the Federal Reserve Board of Governors.

And from elsewhere in the FAQs

HUD cannot interpret regulations promulgated by another federal agency, such as Regulation Z (12 CFR part 226). Please refer to the Board of Governors of the Federal Reserve System for interpretations of Regulation Z.


So, again I'd like to know what authority they are basing that opinion on as it seems HUD will make no interpretation of what belongs and what does not belong in the TIL disclosure required by Reg Z.


Our software allows us to mark the fee whether it's a PPFC or not. I'm surprised Laser Pro doesn't allow this.

Consistently and knowingly overstating the APR would IMO lead to criticism.

Excerpt from the email I received from the attorney.

"On this new RESPA change the docprep fee will always be included in the APR, this was one of the concerns that the Texas attorneys raised from the beginning, but HUD would not change their position. So until HUD changes their position this fee will always be included in the APR charges."

I really don't know what he's talking about!

I appreciate everyone's input because now I know I'm not confused and ignorant. For some reason, I let attorneys intimidate me....when really, I probably know more from a regulatory perspective than they do (I said "probably"). Ok....perhaps "maybe?"....or "possibly?"

I'm with Dan. I don't know what the attorneys are thinking TIL and RESPA are different laws/regs and do not dictate to each other. It doesn't matter where an item appears on the HUD1 as far as TIL is concerned. Most systems I have seen allow all fees to be input individually for TIL purposes (determining APR and FC) then roll them up for HUD1 purposes.

Having a systematic approach that overstates APR's is inviting comment later on.

I visited with the head of the Doc Prep Department with respect to LaserPro. According to her, all fees can be individually listed within LaserPro. From there, she can assign certain fees to be included as PPFCs on the TIL and separately select fees to be included in the "our origination charge" field on the HUD. The only problem is that when these individually listed fees are selected to be included on line 801 (origination charge), the fees are also separately listed in the 800 series (like...line #808), but outside the columns and still with a reference to GFE #1. I thought that fees included in the Bank's Origination Charge were not be be separately itemized.

I've challenged the Mortgage Center's attorney position and will let you know how they respond.

The attorney called me directly, stating that an overdisclosure is considered accurate under Reg Z.

swiggles, that depends (overdisclosure)

In regard to the post right above that...they are not to be itemized UNLESS required by State Law (and some government programs, like USDA)

On????



Well, I'm going to have to choose one or the other.

• Show the entire "our origination charge" as a PPFC on the TIL (labeled in that manner); or
• Show the total origination charge on line 801 of the Settlement Statement (total carried over to the payment column) and then list the items that make up the origination charge starting line #808 with each fee not in the payment column.

Einee Meinee....which option would land me in the shallowest amount of hot water?

An over disclosure of the APR is not considered accurate under Reg Z, it's just not a reimbursable violation.

Swiggles, there's no reason to accept what an attorney says just cause he's an attorney. Copy Dan's statement right above and make them show you the Regs that lets them think LaserPro is ok the way it is.

Other than that, you might try starting a new thread and title it Need Help with LaserPro Origination Charge Section. Ask for users to contact you to help you work it out.

Awesome, everyone! Thanx so much for your help. The attorney opinion refers to the Mortgage Center's software which is not LaserPro, so two different problems here. Let me study further. I like your suggestions.