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#2005720 - 04/01/15 09:18 PM 1098 Reporting for Origination Fee
compliancemap Offline
Member
Joined: Apr 2012
Posts: 59
Hello All,
Guess what - I'm on vacation today but can't quit working until I get this answered - OK enough whining.

We are implementing a new origination fee for 1st lien mortgages. We will be crediting a portion of the fee on the HUD if the customer has a checking account with us at time of closing. I have done hours of research including reading IRS rules and I can't quite get comfortable with the answers to these two questions. I have read several posts on the forums that relate to this and still I can't get it.

1. Our origination fee is not a % of the loan amount, it is 595. Is this 1098 reportable? If so, do we have to add something to the HUD saying it is a percentage of the loan amount in order for it to be reportable? (Refers to IRS Language)

2.If we do a 300 credit for a customer who has a checking account with us (leaving a 295 fee), is that the amount we report if they are 1098 reportable, or the entire 595 since that is what is really being charged and we are crediting it?

Thanks for your help!!!

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Operations Compliance
#2005740 - 04/01/15 10:53 PM Re: 1098 Reporting for Origination Fee compliancemap
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,226
Galveston, TX
1. A flat fee is not reportable.

2. See #1.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2006509 - 04/07/15 01:19 PM Re: 1098 Reporting for Origination Fee rlcarey
compliancemap Offline
Member
Joined: Apr 2012
Posts: 59
rlcarey -

I really appreciate your answer. You have helped me many times in these forums and it is much appreciated!

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