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#2048138 - 11/04/15 10:03 PM
Survey Paid by Seller
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New Poster
Joined: Mar 2014
Posts: 24
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If we have a contract which states the survey (which will be required because a parent parcel is being split and a legal description is needed) will be paid by the seller, do we still need to list it under services you can shop for, get a quote and list it on the provider list? I have been told there are conflicting answers on how to handle this and the CFPB has not put out any guidance specific to this so I wanted to get an opinion from you compliance gods and goddesses.
My initial thought was, the borrower is not paying for it and the loan estimate is supposed to be a good faith estimate of how much the loan would cost the borrower and having the survey fee there could be confusing to our borrower and not a proper estimate. The other part of me says, we need it in order to make the loan so we have to go through the process of contacting a company, getting an estimate and then list the estimate under seller credits to offset it as the seller is paying....which is a lot of work being that the seller will pick whoever he wants and pay for it. As a side note, the broker knows how much the seller is going to pay and won't share that information with us.
I feel like I am on TRID overload still and overthinking things. Help!
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#2048257 - 11/05/15 05:11 PM
Re: Survey Paid by Seller
Nids
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Joined: Mar 2014
Posts: 24
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#2048845 - 11/09/15 08:40 PM
Re: Survey Paid by Seller
Nids
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Member
Joined: Nov 2012
Posts: 82
East Texas
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In the example you gave where the seller is paying, where would the survey fee be listed on the CD? Section H, Other? My pre-TRID instinct says seller-paid column of section C, but I'm trying to retrain my brain...
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All opinions are my own.
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#2048853 - 11/09/15 08:55 PM
Re: Survey Paid by Seller
Nids
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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If it's a cost of a service required by the bank and paid to the bank, it goes in Section A. If it's a cost of a service required by the bank but paid to a third party, and the consumer doesn't select the provider, it goes in Section B. If it's a cost of a service required by the bank but paid to a third party, and the consumer was allowed to shop for the service and does select provider other than one on the bank's list of providers, it goes in Section C. If it's not a service required by the bank as a condition of the loan, it goes in section H, even if it's required by a third party.
I assume the survey is a lender-required service. It will end up in either Section B or Section C, but the dollar amount appears in the Paid by Seller column.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#2048876 - 11/09/15 09:58 PM
Re: Survey Paid by Seller
Nids
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Member
Joined: Nov 2012
Posts: 82
East Texas
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Thank you for the break-down.
The survey is lender-required. However, prior to disclosing the LE, a copy of the sales contract was provided that stated the new survey would be paid for by the seller. I thought in this case we did not disclose that fee on the LE?? So if we did not disclose it in Section C originally (surveys are shoppable/third party) would we still list the fee in C at closing? If we do list it in C as seller-paid, will we be violating tolerances since we did not disclose any fee originally?
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All opinions are my own.
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#2048976 - 11/10/15 04:07 PM
Re: Survey Paid by Seller
Nids
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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If you knew at the time of issuing the LE that the seller would pay the survey fee, you were correct to omit it.
On the CloD, since you did not disclose the cost on the LE and didn't include the service and a provider on the list of providers available to provide services for which the borrower could shop, that service can not be one the borrower could shop for, so it ends up in Section B for this loan. Because the seller is paying for it, there is no increase in cost to the borrower between the LE and actual cost to borrower, so you don't have a tolerance violation.
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John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
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#2048999 - 11/10/15 04:49 PM
Re: Survey Paid by Seller
Nids
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10K Club
Joined: Jul 2001
Posts: 83,226
Galveston, TX
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How could the borrower shop if the seller picked the surveyor in the contract?
What difference does it really make anyway if you put it in B or C??. The borrower didn't have to pay the fee.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2049635 - 11/13/15 08:19 PM
Re: Survey Paid by Seller
Nids
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Member
Joined: Nov 2012
Posts: 82
East Texas
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Thank you John, I appreciate your help. I was originally thinking section H, but I follow your logic & agree on B for this situation. And RL, I agree with your statement "What difference does it really make..." & have said it MANY times during this whole process! I'm just afraid examiners are not going to feel the same way.
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All opinions are my own.
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#2049754 - 11/16/15 02:55 PM
Re: Survey Paid by Seller
Nids
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10K Club
Joined: Jul 2001
Posts: 83,226
Galveston, TX
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Examiners don't know how a GFE and HUD-1 should be completed five years after the last change. You think in the first three months they are going to figure out the LEs and CDs
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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