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#2108146 - 11/21/16 06:49 PM Transfer Taxes on CD
ScoutLaRue Offline
Member
Joined: Jul 2016
Posts: 73
In our state transfer taxes are seller paid. On our buyer CD we do not disclose the transfer taxes at all. However, we do retain a separate seller CD from title company in our file which shows seller as paying transfer taxes at closing. Should we be showing it on our CD as well, or are we ok?

Rereading the official interpretation of §1026.38(g)(1)...and I'm concerned we have been doing this wrong!

2.Transfer taxes—itemization.
The creditor may itemize the transfer taxes paid on as many lines as necessary pursuant to § 1026.38(g)(1) in order to disclose all of the transfer taxes paid as part of the transaction. The taxes should be allocated in the applicable columns as borrower-paid at or before closing, seller-paid at or before closing, or paid by others, as provided by State or local law, the terms of the legal obligation, or the real estate purchase contract.

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#2108147 - 11/21/16 07:16 PM Re: Transfer Taxes on CD ScoutLaRue
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,785
Cape Cod
It's good that you are concerned. Any page 2 closing disclosure fee paid in connection with the transaction -- regardless of who pays it -- must appear on the borrower's closing disclosure, including transfer taxes paid by the seller, real estate commissions paid by the seller or buyer, etc.

It's OK to omit the transfer tax paid by the seller from the loan estimate, but it must appear on the closing disclosure.
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John S. Burnett
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#2108179 - 11/21/16 09:25 PM Re: Transfer Taxes on CD ScoutLaRue
ScoutLaRue Offline
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Joined: Jul 2016
Posts: 73
Thank you. It appears we also have not been including the real estate commissions if it's paid by seller.

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#2108443 - 11/23/16 01:30 PM Re: Transfer Taxes on CD ScoutLaRue
Compliance NABW Offline
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Joined: Oct 2015
Posts: 1,636
The Real Estate commissions itemization was a big issue with operations staff at my previous employer. I had to fight that tooth and nail to get them to understand that it needs to be listed on Pg. 2 of the CD.

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#2108498 - 11/23/16 03:57 PM Re: Transfer Taxes on CD ScoutLaRue
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,893
Galveston, TX
Not sure why it was such a fight. It is pretty clear in the commentary to 38(g)(4):

4. Real estate commissions. The amount of real estate commissions pursuant to § 1026.38(g)(4) must be the total amount paid to any real estate brokerage as a commission, regardless of the identity of the party holding any earnest money deposit. Additional charges made by real estate brokerages or agents to the seller or consumer are itemized separately as additional items for services rendered, with a description of the service and an identification of the person ultimately receiving the payment.
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#2108549 - 11/23/16 05:42 PM Re: Transfer Taxes on CD ScoutLaRue
Compliance NABW Offline
Diamond Poster
Joined: Oct 2015
Posts: 1,636
I agree. They kept saying in certain states it is always seller paid, why disclose on Borrower only CD, etc, etc, etc?

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