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#21731 - 06/25/02 12:21 AM HUD-1 Question
Bear Collector, CRCM Offline
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Bear Collector, CRCM
Joined: Nov 2000
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District of Columbia
I think I have seen something on this someplace, but I have not been able to put my hands on it. If the lender pays for a service such as the credit report, does the service and the amount have to be listed on the HUD-1? I have seen some HUD-1s recently where it states "Credit Report: poc lender", but lists no amount. Is the amount required? Thanks.
Leslie
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Lending Compliance
#21732 - 06/25/02 01:24 PM Re: HUD-1 Question
David Dickinson Online
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David Dickinson
Joined: Nov 2000
Posts: 18,763
Central City, NE
Yes, you must always list the amount and to whom it was paid. Here are some excerpts from the Settlement Statement instructions (Appendix A to RESPA):
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General Instructions
The settlement agent shall complete the HUD-1 to itemize all charges imposed upon the Borrower and the Seller by the Lender and all sales commissions, whether to be paid at settlement or outside of settlement, and any other charges which either the Borrower or the Seller will pay for at settlement. Charges to be paid outside of settlement, including cases where a non-settlement agent (i.e., attorneys, title companies, escrow agents, real estate agents or brokers) holds the Borrower's deposit against the sales price (earnest money) and applies the entire deposit towards the charge for the settlement service it is rendering, shall be included on the HUD-1 but marked "P.O.C." for "Paid Outside of Closing" (settlement) and shall not be included in the computing totals. P.O.C. items should not be placed in the Borrower or Seller columns, but rather on the appropriate line next to the columns.

Section L. Settlement Charges.
For all items except for those paid to and retained by the Lender, the name of the person or firm ultimately receiving the payment should be shown. In the case of "no cost" or "no point" loans, the charge to be paid by the lender to an affiliated or independent service provider should be shown as P.O.C. (Paid Outside of Closing) and should not be used in computing totals. Such charges also include indirect payments or back-funded payments to mortgage brokers that arise from the settlement transaction. When used, "P.O.C" should be placed in the appropriate lines next to the identified item, not in the columns themselves.
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#21733 - 06/25/02 06:06 PM Re: HUD-1 Question
William Offline
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William
Joined: Oct 2000
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In a location
David makes it clear that the POC amount is to be listed. I also take the approach that it is good customer service to show the amount (and by the way look how nice the bank is) we’re paying for the credit report (hence, what we use: “paid by lender”).
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#21734 - 06/25/02 06:10 PM Re: HUD-1 Question
Andy_Z Offline
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On the Net
Are you saying you use PBL instead of or in addition to POC?
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#21735 - 06/25/02 06:21 PM Re: HUD-1 Question
William Offline
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William
Joined: Oct 2000
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In a location
No… (not instead of) Yes… (in addition to)
It would look like this: Credit report: 25.00 POC (paid by lender)

It is nothing more than just letting the customer know that it was paid by the bank.
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#21736 - 06/25/02 06:54 PM Re: HUD-1 Question
David Dickinson Online
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David Dickinson
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Central City, NE
As we audit banks, we are seeing POC-B and POC-L, for "Paid Outside of Closing by the Borrower" and "Paid Outside of Closing by the Lender," respectively. Although, HUD has not issued any guidance on this, I think it makes perfect sense. Wait a minute - HUD and sense? May it never be!
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