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#1661874 - 02/08/12 01:50 PM APR Calculation
Brexford Offline
Joined: Dec 2005
Posts: 51
Stuart, Florida
TILA makes it clear that origination fees (line 801 HUD) and charges for the interest rate chosen (line 802 HUD)are considered finance charges and are deducted from the loan amount to calculate the Amount Financed and by lowering the Amount Financed the APR is increased. When line 802 of the HUD is a credit for the interest rate chosen is the opposite true and the amount of the credit is added to the Amount Financed thus lowering the APR? If so, does this also apply when the credit is greater than the origination fee and results in a net credit on line 803 of the HUD-Adjusted Origination Charges? Are there any restriction on the treatment of the credit based on other charges on the HUD that may or may not be treated as finance charges?

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Lending Compliance
#1661925 - 02/08/12 03:01 PM Re: APR Calculation Brexford
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,463
Bloomington, IN
TILA makes it clear that origination fees (line 801 HUD) . . . are considered finance charges

All origination charges (Line 801) defined by RESPA are not necessarily finance charges under TILA or Reg. Z. As an example, the fee for appraisals performed by an in-house appraiser.

Here's one discussion on the APR question. Click here
The opinions expressed are mine and they are not to be taken as legal advice.

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#1661972 - 02/08/12 03:45 PM Re: APR Calculation Brexford
Richard Insley Offline
10K Club
Richard Insley
Joined: Oct 2000
Posts: 10,169
Toano, VA
There's no such thing as a negative Finance Charge. Do a 10-year search of the threads using the search term "negative finance charge" and you will find several discussions of this issue.
...gone fishing.

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