Good morning-
I am second guessing where the 1st PMI payment should be placed on the LE/CD. My FI collects 1 month at close for the PMI payment that is due the first month of the loan, when the borrower doesn't make a payment.
i.e., the loan closed April 15th...first payment is June 1st...the 1 month collected at close is placed in the escrow and disbursed for the PMI payment due in May.

Does this come out to mean Section F or G? My FI has been placing it in Section G, but I don't think that is correct. It sounds like a prepaid fee and should be in F.

Thoughts?

Look at comment 37(g)(2)-1. It's a Section F fee.

Hi John,
So even though my FI is taking that 1st payment, and placing it into an escrow account for about a month, and then paying it to the insurance company, it will still be Section F?
(I am just preparing for any rebuttals I receive...lol)

How you account for the prepaid payment is not a factor. The prepaid items are not part of the escrow account or its analysis and Sect. G is where the escrow deposit requirement based on the computation year is disclosed. The computation year does not begin until the month the first scheduled payment is due.

The borrower is preparing that one month's premium at or before consummation. The regulation designates prepaid items are to be disclosed in Sect. F.