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#1625632 - 11/08/11 03:46 PM Determination & LOL - GFE??
AuditorK Offline
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Joined: Feb 2003
Posts: 962
PA
The bank pays for the LOL coverage but the cost of the determination is passed on to the borrower. We currently list the determination charge in block 3 of the GFE and the 800 section on the HUD-1. We do not list the LOL charge anywhere on the GFE or HUD-1.

Is this proper?

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Lending Compliance
#1626042 - 11/08/11 09:21 PM Re: Determination & LOL - GFE?? AuditorK
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 78,649
Galveston, TX
No. The charge has to be disclosed. If the bank pays for it, then a credit could be shown in the 200 series.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#1626202 - 11/09/11 01:51 PM Re: Determination & LOL - GFE?? rlcarey
AuditorK Offline
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Joined: Feb 2003
Posts: 962
PA
Okay so it should show in the 200 series on the HUD as a credit. How should it be treated on the GFE. List the LOL in box 3 and then offset it with a credit in box 2?

We only have a small origination fee in box 1 - no ability to pay to obtain better rates. If we now put a credit in box 2, it seems misleading in that the borrower could change their interest rate by paying a fee.

Am I right that we need to offset those "lender paid" settlement charges on the GFE so that the total bottom line cost of credit is more accurate?

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#1626222 - 11/09/11 02:02 PM Re: Determination & LOL - GFE?? AuditorK
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 78,649
Galveston, TX
For that small of an amount, I would not show a credit on the GFE. The charge would appear in Box 3.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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