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#1742288 - 09/19/12 07:23 PM Closing Fee - charged by bank - FC?
Many Hats Offline
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Orlando, FL
If the Bank charges the borrower a "Closing Fee", is this considered a finance charge?

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#1742319 - 09/19/12 07:58 PM Re: Closing Fee - charged by bank - FC? Many Hats
Many Hats Offline
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Orlando, FL
And.....

Should this fee be included in the origination charges on line 801 of the HUD?

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#1742330 - 09/19/12 08:07 PM Re: Closing Fee - charged by bank - FC? Many Hats
RR Joker Offline
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yes

yes
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#1742369 - 09/19/12 08:49 PM Re: Closing Fee - charged by bank - FC? Many Hats
Many Hats Offline
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Okay...not to take this further...can a bank charge a closing fee of $225 or are there rules that say they need to do X amount of work in order for the fee to be bonafide and reasonable?

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#1742388 - 09/19/12 08:58 PM Re: Closing Fee - charged by bank - FC? Many Hats
rlcarey Online
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What fees you are allowed to charge is a matter of State law.
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#1742469 - 09/20/12 12:53 PM Re: Closing Fee - charged by bank - FC? Many Hats
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I would also consider 1024.14

(3) Multiple services. When a person in a position to refer settlement service business, such as an attorney, mortgage lender, real estate broker or agent, or developer or builder, receives a payment for providing additional settlement services as part of a real estate transaction, such payment must be for services that are actual, necessary and distinct from the primary services provided by such person. For example, for an attorney of the buyer or seller to receive compensation as a title agent, the attorney must perform core title agent services (for which liability arises) separate from attorney services, including the evaluation of the title search to determine the insurability of the title, the clearance of underwriting objections, the actual issuance of the policy or policies on behalf of the title insurance company, and, where customary, issuance of the title commitment, and the conducting of the title search and closing.

I would offer my personal opinion on the matter...but you wouldn't like it. wink
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#1742480 - 09/20/12 01:05 PM Re: Closing Fee - charged by bank - FC? Many Hats
rlcarey Online
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Galveston, TX
I would probably not be separating out a closing fee if the bank was performing the closing themselves. It is really just a loan processing fee.

RR - there really is no referral here as they are proposing to do it themselves.

If this is a purchase transaction, you will also have to be sure that you have the IRS information reporting systems in place.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#1742578 - 09/20/12 03:33 PM Re: Closing Fee - charged by bank - FC? Many Hats
RR Joker Offline
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I agree with Randy that it should just be part of the origination charges and not a separate fee. It will have to be part of that since the bank is the one charging the fee anyway.

Randy, the way that part of .14 is worded, it sounded applicable to me. The lender is in a position to refer and they are receiving payment for providing an additional settlement service. Maybe not, but it sure reads that way...to me anyway.
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