Hope you can help, I am not familar with this loan program and am going back and forth on how a fee charged should be disclosed according to Reg X and Reg Z.
GRH charges an "Guaranteed Annual Fee" (not the upfront guarantee fee financed in the loan. The fee is based on the total loan amount, the initial fee for the first year of the loan will be determined and calculated based on the average yearly scheduled Unpaid Principal Balance (UPB) for the first year. The remaining years of the loan will also be calculated and charged on average yearly scheduled UPB, not the actual UPB.
This fee can't be paid upfront, escrows must be established to collect from the borrower. The monthly payments will decrease each year as the average UPB decreases.
Is this fee considered a type of mortgage insurance for disclosing purposes for the GFE or TIL payments? How would this be revealed in an amortizaton schedule and calculated for Reg Z purposes?
Thanks for any help you may be able to provide on this.