With TRID, if a closing cost, such as an appraisal fee, is paid before closing by the borrower, say $400, but the actual cost of the appraisal ends up being $375, is that simply a lender credit of $25 to reduce total closing costs? It would seem that placing the $25 as a negative number in lender credit spot under J Total Closing Costs with a notation that it is an adjustment of the appraisal fee would suffice. Is there a requirement, since it is for a specific fee, to show a negative $25 in the "paid by others" column on the appraisal fee line of the CD. That second approach doesn't seem to provide the simple clarity the first approach does.

Anyone encounter this?

You could apply the $25 towards another closing cost (shown as paid before closing by borrower), or you could show it as a negative number in the paid at closing column (so you have $400 paid before closing, and -$25 paid at closing).

The $375 actual cost of the appraisal should appear in the Loan Costs section on page 2 of the CD in the "borrower paid before closing"column. The $400 collected amount should not appear there since only $375 was (or will be) paid to that service provider. It makes the most sense to me to show the excess $25 collected for the appraisal in the "other credits" area in section L on page 3 of the CD with an appropriate explanation.

I'm just going with the CFPB's answer from the 4/12/16 webinar. This question is discussed at about 52:40.

Three options: 1. may reimburse customer directly prior to closing. 2. allocate to other services. 3. disclose full amount paid before closing, then disclose a negative amount on the same line.

This is almost the exact scenario they discuss.

Webinar link

We handle it as in option #3. We indicate what the borrower paid before closing (400.00) then in the borrower paid at closing column list the 25.00 as a negative number.

I think using the negative on the same line is the easiest and most readily apparent means of disclosing what took place.