I think I've misinterpreted how this should be disclosed.

We issued a GFE with charges normally paid by the borrower. When we received a copy of the settlement statement from the closer, there was a charge in the borrower's column on page 2 for a service that is typically paid for by the seller.

Is this a changed circumstance that would prompt us to reissue a GFE? Or, should this fee be shown in the seller's column with an adjustment between the buyer and seller on page 1 of the HUD? Or,would we simply show the fee in the 'unlimited tolerance' category of the HUD? I'm confused on what is required. Please help!

Well, you can't redisclose after the closing if that's what you're asking. Further, seller's fees don't go on the GFE.

It would help to know what fee we're talking about here.

Assuming this something agreed on in the OTP, I would have done as you suggested showing it pd by seller with credit from borrower on p1.

Actually the closing hasn't occurred...we just rec'd a copy of the settlement statement from the the settlement agent and noticed the extra borrower charge. The fee is for "doc stamps".

If that's not a cost of doing the loan in your state, it doesn't go on the GFE.

You can tell them to put it on the seller's side and do a credit on p1. Remember, the title company works for you.

well, the doc stamps are definately required in the transaction, but are almost exclusively paid for by the seller.

but you're right, the title company should be able to complete the settlement statement to our liking.

Thanks!

Why is the borrower paying this seller fee? If it is customarily a seller fee it wouldn't have gone on the initial GFE but if it was a condition of the contract for the borrower to pay in this case we would have redisclosed within 3 days of receiving the info to add the fee to the borrower's costs.

You would have been wrong to redisclose, Rules.

Conditions of the OTP do NOT belong on the GFE...ever. It's an estimate of the costs to get the loan, not purchase the property.

Is "doc stamps" associated with the OTP, we don't have those in our state... If it is a fee usually paid by the seller, like the other half of the escrow closing fee, but if the contract states the borrower will pay all of it we redisclose to include that total fee.

Again, you shouldn't be doing that.
The Offer to Purchase has no bearing on the GFE at all.

The GFE is only supposed to show those fees that are a cost of the loan.
If you wouldn't show a particular fee on all your loans (ex: closing fee; title insurance; tax transfer) then you shouldn't be showing it just because an OTP calls for the borrower to pay that.
Out of curiousity, what is the valid changed circumstance that you're using to redisclose a fee from the OTP? Condition of an Offer to Purchase is not a valid changed circumstance.

If memory serves me, in Florida, doc stamps are typically a 50/50 split between borrower and seller. Our GFE's originally showed the full amount to the borrower due to no leeway on tolerance and the info bolded below. I think at some point, we changed to 50/50 and had little issue with it. However, I don't recall a situation where the borrower ever paid more than the 50%...sometimes the seller ended up paying all and we showed a seller credit.

Unfortunately, these are a zero tolerance (think transfer tax). If it is typically a 50/50 split and the contract says otherwise, you would not have been able to consider that contract prior to issuing the GFE, I'm not convinced you couldn't consider that a changed circumstance. It's information you didn't know of prior to receiving it...it seems reasonable to do it that way. The only other recourse is to show the 50/50 split and then the credit...but that's almost like going around your elbow to get to your nose somehow...Gotta love RESPA.

Q: Are charges to the seller listed on the GFE?
A: RESPA requires that only the borrower receive a GFE. The GFE is defined as an estimate of settlement charges a borrower is likely to incur in connection with the settlement. Charges that typically would not be charged to the borrower, but would be charged to another party—such as the seller—do not have to be included on the GFE. If the borrower typically would incur charges for title services and lender's and owner's title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service. If there is a question about whether the borrower or seller is to pay for a particular settlement service, the charge for that service should be disclosed on the GFE.

Truffle, we would issue the original disclosures as you described, based on fees typical for the loan, but if we get a purchase contract down the road that shows the borrower paying fees not typically charged to the customer then we do have a valid changed circumstance "information particular to the borrower or transaction not relied on before" to redisclose and add the fees.

FWIW, we do the same as Rules. Most of banks in a foreclosure sale stipulate that they as seller will not pay the transfer tax (in MA) that is normally paid by the seller. In those cases, we redisclose.

Look at what RR Joker bolded. That refers to a settlement service. The original poster talked about a fee that was a carge to the seller but through the OTP the buyer agreed to pay. That doesn't sound like a settlement fee to me. So I stand by my statement that only loan fees go on the GFE. OTP doesn't usually address terms of the loan therefore, except for an oddball tax stamp issue, you do NOT have a valid cc.

This is the FAQ that allows us to disclose only 1/2 of the settlement fee as borrower's cost, because it is "common practice" in our area:

7) Q: If it is common practice in the locality to charge both the seller and the borrower a separate charge for the service for conducting the settlement, how should the charges for that service be disclosed on the GFE?
A: The charge to the borrower for conducting the settlement must be included in the total for Block 4 of the GFE. Charges that the seller pays as a matter of common practice and experience are not disclosed on the GFE.

And this is the FAQ that allows us to increase that fee if the borrower has agreed to pay all of it in the sales contract:

1) Q: Once a GFE is issued are there any circumstances under which the loan terms or charges can change?
A: Yes. The loan terms or charges can change in the event that there are changed circumstances. ―Changed circumstance is now defined in § 3500.2 as: (1) Acts of God, war, disaster, or other emergency; (2) Information particular to the borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after the GFE has been provided, which information may include information about the credit quality of the borrower, the amount of the loan, the estimated value of the property, or any other information that was used in providing the GFE; (3) New information particular to the borrower or transaction that was not relied on in providing the GFE; or (4) Other circumstances that are particular to the borrower or transaction, including boundary disputes, the need for flood insurance, or environmental problems.

Thats what I was using as an example Truff-the oddball tax stamp issue.