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#2172525 - 04/09/18 03:51 PM Reporting Discount Points
DoubleNickel Offline
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Joined: Jan 2013
Posts: 25
We have a transaction where the borrower is paying discount points and the seller is paying part of the amount. It is split on the Closing Disclosure showing the amount paid by borrower and amount paid by seller. Our question is, what amount do we report on the LAR - the total or just the amount paid by borrower?

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#2172534 - 04/09/18 04:11 PM Re: Reporting Discount Points DoubleNickel
David Dickinson Offline
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David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
I emailed the CFPB about this question as well as Total Loan Costs, Total Points & Fees & Origination Charges. Here's the answer I received:
Total Loan Costs = Only Borrower paid.
Total Points & Fees = Borrower or Seller paid.
Origination Charges = Only Borrower paid.
Discount Points = Only Borrower paid.
_________________________
David Dickinson
http://www.bankerscompliance.com

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#2172536 - 04/09/18 04:14 PM Re: Reporting Discount Points DoubleNickel
DoubleNickel Offline
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Joined: Jan 2013
Posts: 25
Thank you!!!

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#2172541 - 04/09/18 04:26 PM Re: Reporting Discount Points DoubleNickel
C5nonmortgagebank Offline
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Joined: Aug 2016
Posts: 30
Hmmmm this makes me a little nervous. The rule and small entity compliance guide have language about the total disclosed on line A.01 of the Closing Cost Details page of the Closing Disclosure and it is the amount of points paid to the credit to reduce the interest rate. If reporting only the borrower paid it would not match the amount of points paid to reduce the interest rate.

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#2172561 - 04/09/18 05:32 PM Re: Reporting Discount Points DoubleNickel
RR Joker Offline
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RR Joker
Joined: Nov 2002
Posts: 20,654
The Swamp
I find it odd they take one strategy on Total Points & Fees and a completely different approach on TRID loans.
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#2172688 - 04/10/18 01:00 PM Re: Reporting Discount Points DoubleNickel
David Dickinson Offline
10K Club
David Dickinson
Joined: Nov 2000
Posts: 18,762
Central City, NE
Quote:
Hmmmm this makes me a little nervous. The rule and small entity compliance guide have language about the total disclosed on line A.01 of the Closing Cost Details page of the Closing Disclosure and it is the amount of points paid to the credit to reduce the interest rate. If reporting only the borrower paid it would not match the amount of points paid to reduce the interest rate.

I don't disagree with your logic. That's why I called the CFPB on this. If anyone has any other info, I'd appreciate seeing it.
_________________________
David Dickinson
http://www.bankerscompliance.com

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