I've got examiners in and they're telling me that if there is a charge on the HUD for a service the borrower requested that is not required by the lender, it must be shown in the comparison chart on pg 3 in the unlimited tolerance section. The way I understand it, their legal is citing pg 59 of the FAQ's - even though the question has to do with POC items- they are zeroing in on the "any amounts" statement:
3) Q: How are items that were paid outside of closing; (P.O.C.) shown in the Comparison Chart on page 3 of the HUD-1?
A: The HUD-1 column in the Comparison Chart must include any amounts shown on page 2 of the HUD-1 in the column as paid by the borrower, plus any amounts that are shown as P.O.C. by or on behalf of the borrower.

I think it's a bunch of hooey (or maybe I'm the one who's wrong and someone will set me straight) - but the only written argument I can find so far is Pg 62 of the FAQ's:

14) Q: How is it determined what settlement charges belong in the HUD-1 column in one of the three categories in the Comparison Chart on page 3 of the HUD-1?
A: Charges for settlement services that are disclosed on the GFE or would have been appropriate to disclose on the GFE, whether the charges are paid by the borrower, paid on behalf of the borrower or paid outside of closing, must be listed in one of the three tolerance categories of the Comparison Chart on page 3 of the HUD-1.

But I don't think they're buying it.
Anyone else have another argument I can use?

I agree it's a bunch of hooey. Non-settlement costs don't belong on a GFE, therefore they do not go on the comparison chart. Ask them where the heck they are supposed to FIT based on the block headings!

They will go in the 1300 section of the HUD like a non-required, but borrower wanted home inspection, etc. would go.

FAQ p7 13) deals with POC items and states in part: The standardized GFE form does not allow information to be included on any part of those totals that would be paid outside of closing. Such information would not help borrowers to shop for loans and would not facilitate comparison of the charges on the GFE with the charges on the HUD-1.

The last part in particular, seems to point to the fact that something the borrower decided to do THAT IS NOT REQUIRED FOR THE LOAN, does not belong on the GFE and therefore in a comparison box on the HUD. I would argue that the GFE is a shopping tool, not a comprehensive list of charges. Use a Home Owners Warranty as an example. Banks don't require it but buyers often purchase it. It's not on the GFE because it's part of the OTP. So does it too go on p3 of the HUD?

jmho...good luck!

Thanks to both of you. FWIW my examiner would say that yes, the HO Warranty would go on pg 3 in the unlimited tolerance category on a blank line (unless I can convince him otherwise).

I think this is soooo wrong but I can't find something definitive that says only costs for services required by the lender go in the comparison. I think they are taking this FAQ answer completely out of context.

ARGHHHH!!!

Again, Saal, look at the explanations. No WHERE does it say :borrower optional wants and desires: It all has to do with REQUIRED - shop for or required by us.

Is he saying it's okay not to be on the GFE, but should still go in the comparison? That's just silly.

Maybe this Q&A will do it:

Q: How is it determined what settlement charges belong in the HUD-1 column in one of the three categories in the Comparison Chart on page 3 of the HUD-1?
A: Charges for settlement services that are disclosed on the GFE or would have been appropriate to disclose on the GFE, whether the charges are paid by the borrower, paid on behalf of the borrower or paid outside of closing, must be listed in one of the three tolerance categories of the Comparison Chart on page 3 of the HUD-1.

Also look at Appendix A (pg 68256, column 2 of the FR) under "charges that can change". It states the amounts shown in Blocks 9, 10, and 11 on the GFE must be entered along with any 3rd party settlement services for which the borrower selected a prover other than one identified by the LO must be included. No where does it say, 'along with OTHER things the borrower wanted that the bank didn't require/identify".

Yes - that's exactly what he's saying - would not be on the GFE but must be on the comparison chart. I guess that's my problem. I KNOW that the GFE is only for required charges and he agrees, but what he's saying is that the HUD column on the comparison chart must include ALL borrower charges, required or not, and if not required they go in the unlimited category and the GFE column would show $0's.

It's CRAZY! But I'm still having trouble pointing to the right instruction that says we don't have to do this.

So, in tried and true Dan, David and Randy form, ask HIM to show YOU where it says this!
He's going to have to point to chapter and verse if he writes you up on it so he might as well point it out to you now.

(fingers crossed he can't and will then have to back down.)

Sounds like an excellent solution. When we last spoke he seemed to be waivering a bit so perhaps he'll back off. When it comes to actually writing this up, I think it will be difficult for him to cite anything specific.

I'm feeling better about this. Fingers definitely crossed - Thanks much.

Let us know how it turns out, please. I've got examiners coming in a couple months so I'd love to know in advance.

Yes, please do let us know how it turns out for you. My fingers are crossed that the CO wins this argument!

Still waiting. Will post when I have an answer. FYI our regulator is OCC.