When using the optional form for transactions without a seller in a refinance I am trying to determine when a payoff would have to be shown. I know that the disclosure is to be made in good faith and if we had this information it should be included. My question is on the bold language from the Reg that uses the term "third party." This leads me to believe if we had an internal refinance with a payoff we would not show the payoff since it is not going to a third party. Thoughts?

(2) Optional alternative calculating cash to close table for transactions without a seller. For transactions that do not involve a seller, instead of the table described in paragraph (h)(1) above, the creditor may alternatively provide, in a separate table, under the master heading “Closing Cost Details,” under the heading “Calculating Cash to Close,” the total amount of cash or other funds that must be provided by the consumer at consummation with an itemization of that amount into the following component amounts:

(iii) Payoffs and payments. The total amount of payoffs and payments to be made to third parties not otherwise disclosed pursuant to paragraphs (f) and (g) of this section, disclosed as a negative number, labeled “Total Payoffs and Payments”;

37(h)(2)(iii) Payoffs and payments.
1. Examples. Examples of the amounts incorporated in the total amount disclosed under § 1026.37(h)(2)(iii) include, but are not limited to: payoffs of existing liens secured by the property identified under § 1026.37(a)(6) such as existing mortgages, deeds of trust, judgments that have attached to the real property, mechanics’ and materialmans’ liens, and local, State and Federal tax liens; payments of unsecured outstanding debts of the consumer; and payments to other third parties for outstanding debts of the consumer (but not for settlement services) as required to be paid as a condition for the extension of credit.

Bump. Any thoughts on this?

You can read "The total amount of payoffs and payments to be made to third parties" in a couple of ways.

The "to third parties" could be understood to apply only to "payments" or to "payoffs and payments."

John, I agree it is all in how you read it. My first impression was the latter (payoffs and payments), but this is why I was questioning the interpretation.

What will others be doing? Will you show the payoff on the LE for internal refinances?

We are including the payoff of internal refis on our LEs.

The bank has a refinance and on the Payoffs and Payments table we are not itemizing what is being paid off. For example, we just note Credit Cards and the total dollar amount. We are also listing in house loans that will be paid off. Again just listing the loan numbers and the total dollar amount for all the loans. Is this okay or should we be itemizing? We are disclosing the in-house payoffs on the LE also.

While you might not find anything specific, I would think you would want to be itemizing them so the borrower was sure what exactly the bank was paying off on their behalf.

Thanks Randy. Today I did find a sample (H-25(G) that shows itemized payments/payoffs on the Payoffs and Payments table .

The bank has a refinance and on the Payoffs and Payments table we are not itemizing what is being paid off.

Look at 1026.38(t)(5)(vii)(B).

....this section may be added with the heading “Payoffs and Payments” that itemizes the amounts of payments made at closing to other parties .....


If you are paying off Chase, Citi and Discover and you just list "Credit Cards" how is that itemizing your payments to Chase, Citi and Discover?