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#1633584 - 11/30/11 04:26 PM Bank eats escrow waiver fee - disclosed on GFE
Valley Girl Offline
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Customer originally applied for loan with escrow. Now customer has changed their mind and wants to waive escrow. There is an escrow waiver fee. Instead of issuing a revised GFE to show the escrow waiver fee; the lender just wants to "eat" the fee.

Is that okay? I originally thought that all fees needed to be disclosed on the GFE regardless of who paid them but then I read one of the FAQs which said that the loan originator must list all required third party services on the GFE and HUD regardless of who paid for it.

Thanks!

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RESPA
#1633588 - 11/30/11 04:28 PM Re: Bank eats escrow waiver fee - disclosed on GFE Valley Girl
rlcarey Online
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rlcarey
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Who is the escrow waiver fee going to be paid to?? Is this a fee that the bank pays at the time of the sale into the secondary market?
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#1633648 - 11/30/11 05:08 PM Re: Bank eats escrow waiver fee - disclosed on GFE rlcarey
Valley Girl Offline
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I guess the bank will be paid less for the loan if there is no escrow.

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#1633653 - 11/30/11 05:13 PM Re: Bank eats escrow waiver fee - disclosed on GFE Valley Girl
Truffle Royale Offline

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Then it IS a secondary market fee.
If that's the case, it's not a condition of the loan so it does not have to show on the GFE.

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#1633684 - 11/30/11 05:37 PM Re: Bank eats escrow waiver fee - disclosed on GFE Truffle Royale
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Okay - thanks!!

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#1634096 - 12/01/11 03:09 PM Re: Bank eats escrow waiver fee - disclosed on GFE Truffle Royale
Dan Persfull Online
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Dan Persfull
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Originally Posted By: Truffle Royale
Then it IS a secondary market fee.
If that's the case, it's not a condition of the loan so it does not have to show on the GFE.



The borrower either escrows or pays a fee for not doing so. How is that not a condition of the loan?

The fee is being paid to the investor. In this case by the lender.
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#1634138 - 12/01/11 04:01 PM Re: Bank eats escrow waiver fee - disclosed on GFE Dan Persfull
Truffle Royale Offline

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Not necessarily, at least as I understand it, Dan.
The borrower either escrows or not.
Further, not every investor charges a fee for non-escrow.
The fee occurs after closing at the time the loan is sold on secondary.
So wouldn't it be up to the bank to decide if they want to pass on the fee thereby making it a condition of the loan or not?

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#1634258 - 12/01/11 05:55 PM Re: Bank eats escrow waiver fee - disclosed on GFE Truffle Royale
rlcarey Online
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I'm with T/R on this one. It all depends on whether the bank is trying to recoup this secondary market sale cost. Otherwise, it is just part of the secondary market transaction.
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#1634277 - 12/01/11 06:12 PM Re: Bank eats escrow waiver fee - disclosed on GFE rlcarey
Truffle Royale Offline

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whew! Thanks, Randy. smile

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#1634279 - 12/01/11 06:15 PM Re: Bank eats escrow waiver fee - disclosed on GFE Truffle Royale
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Wouldn't you have a fair lending issue if you passed the charge on to some customers and not others?

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#1634283 - 12/01/11 06:20 PM Re: Bank eats escrow waiver fee - disclosed on GFE RulesFollower
Truffle Royale Offline

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I don't see how if all investors don't charge it to begin with.
Further, if known at the time of application, it's lumped in with the origination fee so how would anyone even know to raise a fair lending issue?

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#1634312 - 12/01/11 06:52 PM Re: Bank eats escrow waiver fee - disclosed on GFE Truffle Royale
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But with an investor that DOES charge it, wouldn't it be a fair lending issue if some people with escrows waived paid a fee and others didn't?

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#1634345 - 12/01/11 07:19 PM Re: Bank eats escrow waiver fee - disclosed on GFE RulesFollower
rlcarey Online
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Only if is was done based on a prohibited basis.
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#1634377 - 12/01/11 07:52 PM Re: Bank eats escrow waiver fee - disclosed on GFE rlcarey
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Thanks rl, that makes sense.

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