RESPA RoundUp July 2010 stated that if a disclosed GFE item was not used, typically owners title insurance, that fee was not to be included in the GFE comparison column since there was no corresponding fee from the HUD. This is also found in Appendix A of Reg X. We have been operating under that premise since 2010. We now have a new hire that is questioning that process and wants to include all GFE disclosed items in the comparison columns whether or not the service/fee was expended. By doing so,IMO this may prevent a tolerance violation by using an over inflated GFE Total from which to calculate the tolerance difference. Looking for opinions from others on this matter.

You're right and the new hire is wrong, to put it bluntly.

mcharest, your last sentence states exactly the reason for HUD's 2010 FAQ response that the cost should not be included in the Comparison Chart on the HUD-1.

I appreciate the responses. Having to engage in this topic of conversation four years after the fact is a bit odd (frustrating) to say the least. Her argument, among others, is the LOS doesn't acknowledge the requirement and they have a large compliance department so they must know the regulations. My reply was simple: It wouldn't be the first time a LOS was wrong. Thanks again.

Don't know what LOS you're using, but our LOS (LaserPro) handles it correctly.

As does Compliance One. But the person inputting the data has to input it correctly. There is no LOS system out there that I'm aware of that has the crystal ball on what the final fees are.

We, very recently, converted to EasyLender (Fiserv Product). I'm being told it doesn't handle this. I've recommended our processing manager have a conversation with the vendor and explore further.

Somehow, I doubt very seriously that EasyLender has gotten by this long with that type of error...it's likely input error.

C-1 didn't handle it correctly (or easily) at first. WE literally had to covert back to an app, change the unused GFE fee to $0 and then convert back to a loan.

Now, if we enter $0 on the loan side, it automatically leaves it off the comparison without us having to 'finagle' it.

Sorry to resurrect this post, but I am trying to avoid our bank going down the wrong path. We have been abiding by July 2010 Respa Roundup clarification that if a settlement service is not purchased (most likely but not limited to OTI), then the fee for this service would not be included in the comparison chart. Recently, this position has been questioned by a mortgage lender who didn't agree. Upon clarification from our Regional FDIC office, they responded in writing to our compliance officer that the way we interpreted the clarification in the Roundup is incorrect and that all charges listed on the GFE must be reflected on the HUD. Did something change, or is the FDIC incorrect in its written response on this matter?

PS...We are an EasyLender bank and the previous poster is correct in that EasyLender does not handle it properly (as in excluding a fee not incurred). I've discussed with them and they state that the work-around we have to use is much like what RR Joker initially had to do with C-1.

Nothing changed.
The person you talked to at FDIC is incorrect.
I suggest that you show them the 7/10 Round Up question you based your position on.
Then ask them to show you what they're basing their 'interpretation' on.
Ask them how doing it the way they are now espousing is going to get by without being dinged as padding by your bank? (listing ALL the fees from the GFE when you only used some of them will give you a much wider zone before you hit the 10% tolerance)

Thanks, Truff! I'm getting pushback and basically since the FDIC is ignoring the 7/10 Roundup, then we will too. I feel sick!

If you're going to change your procedure based on the response from one FDIC person, be very sure you retain the written response from them and document your reactions to it up one side and down the other.

I still have scars from the one time I did something based on one examiner's written statement only to have my assets handed to me on a platter by the next examiner who came through and disagreed with what the previous one had directed. The second examiner ran it up the chain of command so the district head opined IN WRITING. That's what we use as the basis for our procedure now.

I went through a very extensive exam at the end of 2013 and the first part of 2014. Our FDIC examiners (Chicago Region) never questioned leaving the non purchased items off the page 3 comparison chart.

Make sure this is an FDIC opinion and not a field examiner's opinion.

WE were told to leave the non purchased items off of the comparison chart. Not by an examiner but by our independent auditors.

That's exactly how it is to be done for the very reason TR pointed out above...padding! The examiner's opinion is not right. I'd escalate it. I am actually a bit shocked they gave an opinion in writing since they only 'interpret' the rule and did not write it.

Believe me, I'm absolutely on board with all of you. The problem is that since our compliance officer received a written opinion from the FDIC's Assistant Regional Director, we are going to hang our hat on this opinion. In the opinion letter, the Assistant Regional Director states the interpretation is based on the Rule, the Commentary, Frequently Asked Questions, and the guidance and examples provided by the CFPB.

According to a new policy our CO is proposing, we are going to quote OTI on all home-secured RESPA-covered loans, not just purchases. We will no longer eliminate services from the comparison chart that were not incurred; we will knowingly allow this to pad our fees.

I sent a written response to the CO that I strongly disagreed with the opinion handed down by the FDIC and our new policy going forward. Response: we are going forward with the written opinion in hand as the basis for our new policy. I feel like I've walked into the Twilight Zone!

Has anyone else changed their position on this subject or have been advised by their regulators to do what we are now going to be doing?

No

and the guidance and examples provided by the CFPB

I wonder what guidance and examples this person got from the CFPB.

Based on the comment posted below from the TILA-RESPA Integrated Disclosure rule Small entity compliance guide it sure appears to me the CFPB agrees with the Round-up.


http://files.consumerfinance.gov/f/20140...iance-guide.pdf

7.7 What if the creditor estimates a charge for a service that is not actually performed? (Comment 19(e)(3)(ii)-5)

The creditor should compare the sum of the charges actually paid by or imposed on the consumer with the sum of the estimated charges on the Loan Estimate that are actually performed. If a service is not performed, the estimate for that charge should be removed from the total amount of estimated charges. (Comment 19(e)(3)(ii)-5).

Honestly, Luvinit, I'd show all of this to your CO and recommend that (s)he forward it on to the Assistant Regional Director or their boss.
I firmly believe that if your bank goes ahead and (erroneously) change how you prepare the HUD, it IS going to come back to bite you.

I agree with you 100% Truffle. A while back we had included a fee for a survey that we didn't actually charge and we were told to remove it because it was basically padding the total making it easier to stay within tolerance. We weren't doing it purposely. All is good on the homefront now. Until next August.

As you recommended Dan and Truff, I (re)sent the CO this thread with the up-to-date responses along with the CFPB's publication for the TILA and RESPA Integrated Disclosure that contains the CFPB's direction (7.7) on how this situation is to be handled. The response I got back is essentially that we have received the FDIC's guidance and the CO prefers that we operate under that opinion. She will address my concerns at a later date. I don't want to go over the CO's head at this time, but feel like I need to. How to do this without creating ill will with the CO?

Personally, I think you have done all you can do...if it falls back on anyone at a later date, it won't be you.

The response I got back is essentially that we have received the FDIC's guidance

What region did this opinion come out of? I personally would escalate it to DC.

But she can't, Dan, because her CO is saying no.

You and I both have first hand experience with Senior Management telling us to step down off our soap box and just follow orders.

This issue has just risen its ugly head again in our shop.
It centers around GFE Block 4 "Title services and lender's title insurance". On the GFE block 4, we disclosed five charges the bank anticipates using. Example the total is $650.00. The closing agent's wire fee and courier fee was $50.00 and included in block 4. However, at closing the $50.00 of fees were not assessed by the closing agent. HUD Page 2 line 1101 was $610.00. The question is HUD page 3 comparison chart. What should the amount be in the GFE column? $650.00 OR 600.00. Our shop has more than one opinion.
AND- Does the July 2010 Roundup apply to all fees not accessed/charged or only Block 5 OTI?