If the bank already knows it will be over the allowed 3% charge on a HE loan should we do lender credits on the LE or do the cure on the CD?

I know of one lender who isn't showing the lender credit on the LE. Their theory is: "If a fee changes and the credit actually should be less to get to the 3% mark, I have to swallow the loss, and who is going to complain that they got a discount?"

On the other hand, there's not much that can change. I think the risks are low in putting it in the LE.

On disadvantage is if your applicant uses the LE to shop around. Your fees will appear higher than they eventually will be. But hardly any applicants acually use an LE to shop.

It is too bad it can't be shown on the LE that, regardless of fees shown or what the total fees are on the CD, the total fees the customer will pay will not exceed X dollars (being 3% of the loan amount).

Thanks Z...we decided to show the lenders credit on the LE

At my former bank, we offered no closing costs home equity loans. We did NOT show a credit on the, then, GFE. It takes communication from the lender to the applicant. If over the 3% ceiling, we also did NOT show a credit......just explained to the customer that the fees would not be greater than 3% of the loan amount....again....communication from the lender to the applicant. I know.....old fashioned concept..........

Just realize that you are locked into giving the borrower that lender credit no matter what the fees turn out to be, You can make it more, but you cannot make it less on the CD.

I would really not recommend going in that direction on the LE.

Would it be considered a violation not to show the credit for the amount in excess of the 3% limit on the CloD? We would just issue the customer a check.

It looks like Compliance One does not support entering a general lender credit on a Home Equity loan, a credit will only show up if the fees exceed the TRID tolerances.

Our other option is to pay some of the fees and show it as paid by others.