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#1860876 - 10/11/13 03:52 PM HELOC Fee: Hunting the Unicorn
Norman Paperman Offline
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Norman Paperman
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As my title suggests, I am hunting a Unicorn today.

Certain staff at my FI are saying "I heard something about not being able to charge an origination fee on a HELOC. We are required to call it a documentation fee."

I have combed through Reg Z and cannot find anything to support this statement. I think it's bogus unless someone can enlighten me. It just doesn't make any practical sense.

They are also saying there is a prohibition against financing the origination fee.

Anyone?
Last edited by Norman Paperman; 10/11/13 03:54 PM.
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Lending Compliance
#1860886 - 10/11/13 03:58 PM Re: HELOC Fee: Hunting the Unicorn Norman Paperman
JWills, CRCM Offline
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The Mitten State
WE charge an origination fee on our helocs. We have never had an issue.
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#1861540 - 10/15/13 06:50 PM Re: HELOC Fee: Hunting the Unicorn Norman Paperman
Beagles22 Offline
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State of confusion
As do we, have them show you where they saw it, just like I always have to 'show them the regulation' - have them show you the regulation showing you can't do this. Then let me know, perhaps it is a state issue so I don't want to say go ahead, but I don't know of any federal rule saying this.
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#1861547 - 10/15/13 06:56 PM Re: HELOC Fee: Hunting the Unicorn Norman Paperman
rlcarey Offline
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Galveston, TX
This would definitely be a State law issue, if any.
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#1861556 - 10/15/13 07:08 PM Re: HELOC Fee: Hunting the Unicorn rlcarey
Al Miller Offline
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Pleasanton CA USA
Tnis masy be confusion on opening fees charged to the account. Many banks do not allow this because of the difficulties in calculating the APR on the first statement.

Al
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#1861573 - 10/15/13 07:18 PM Re: HELOC Fee: Hunting the Unicorn Norman Paperman
ahkcompliance Offline
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Midwest
For HELOCs, state law does not allow an origination charge. We have to call it a documenation fee.

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#1861697 - 10/16/13 01:07 PM Re: HELOC Fee: Hunting the Unicorn ahkcompliance
Tesla Offline
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Originally Posted By: ahkcompliance
For HELOCs, state law does not allow an origination charge. We have to call it a documenation fee.


What state are you in?
Last edited by Tesla; 10/16/13 01:07 PM. Reason: transposed words
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#1861897 - 10/16/13 05:04 PM Re: HELOC Fee: Hunting the Unicorn Norman Paperman
Norman Paperman Offline
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Yeah we don't charge an "opening fee". AHK, I would also be interested in hearing what state you are in.

Thanks to all the contributors here.
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#1863178 - 10/21/13 04:34 PM Re: HELOC Fee: Hunting the Unicorn Norman Paperman
Norman Paperman Offline
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How about this one kids. Can anyone tell me whether they use a separate application for HELOC's as opposed to one application for all non HMDA loans?

I'm having a heck of a time finding a vendor that sells these forms.
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#1863181 - 10/21/13 04:38 PM Re: HELOC Fee: Hunting the Unicorn Norman Paperman
JWills, CRCM Offline
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The Mitten State
We use the standard 2nd mortgage/heloc application. Simple front and back. If it is not hmda reportable, we are trying to train the LO's to 'x' out the GMI section. Note the word 'trying'. A neverending process.
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#1863369 - 10/21/13 08:30 PM Re: HELOC Fee: Hunting the Unicorn Norman Paperman
Norman Paperman Offline
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Anyone else out there using a separate application for HELOCS?
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#1863375 - 10/21/13 08:36 PM Re: HELOC Fee: Hunting the Unicorn Norman Paperman
manimal Offline
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manimal
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We used to have one, but when the regs started changing we changed to an all-inclusive RE app for consumers. We cross out the GMI section on HELOC apps. Most applicants don't bother filling it out anyways, even when we want them to.
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