When a 2nd mortgage closes the same day as the 1st mortgage, and there are overlapping fees, does the gfe (and the HUD1A)for the 2nd mortgage need to reflect the fees (such as appraisal, title work, flood) as poc or can they be left off the gfe and hud? I heard there is guidance but have not been able to locate.

I wrote the following in our August 2010 E-Newsletter. I think you'll find your answer (and more) here:

Two Phase Financing
There has been much discussion about scenarios when there will be two loans involving one application. Do fees show up twice even if they are only charged once? For instance, only one credit report or appraisal that is used for both loans? Here are some scenarios to illustrate:

1. Two-phase financing (construction followed by permanent financing): the lender should issue two GFE’s & Settlement Statements.

2. 80/20 Financing (1st/2nd lien) to purchase a home (one simultaneous closing for both loans): Do fees show up on both sets of disclosures even though they are charged once?

3. Bridge loans: What if the bridge loan is closed on the current dwelling on Monday so the Right of Rescission can expire? On Friday, the closing on the new dwelling is completed. In other words, these are not simultaneous closings, but both are necessary to purchase the new home. The bridge loan is exempt from RESPA, but many lenders issue RESPA disclosures for both loans.

When I asked HUD about these scenarios, without hesitation they said to list the fees once on the applicable GFE and Settlement Statement. I like this answer because if you listed the fees twice and were outside of tolerance, you would have to reimburse the borrower twice. This is not what HUD intended.

We have a related question. The seller is holding a 2nd mortgage purchase money. Do the 2nd mortgage fees (recording, doc stamps, intangible) need to be disclosed on the GFE and if so, where?

Bump please.

We don't have doc stamp or intangibles in IN but why would the seller's cost to record their mortgage be part of your loan transaction? IMO they would not appear on your GFE or your HUD, but again I don't deal with the doc stamps or intangible so I'm not sure how they work.

I agree, the seller financing the second mortgage would be like another lender doing the second...it's not a part of your transaction and therefore, not disclosable.

In Florida recording doc stamps and intangibles are typically a borrowers charge.

Maybe so but the consumer is not the bank's borrower for the seller's 2nd mortgage therefore the bank IMO has no disclosure requirements for that transaction nor should they be collecting any fees associated with the seller's loan. That is, or should be, the responsibility of the seller.