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#2193400 - 09/21/18 06:29 PM Disclosure issues
Live 2 Comply Offline
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Live 2 Comply
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Ok so we have been disclosing a tax service fee in Section B instead of A for our secondary loans for the past year. All of our loans go through a quality review from our servicer, and one of the most recently closed found this (However from looking back it's been occurring for some time) Not really sure how this was changed on the template, but attempting to do damage control. Obviously, going forward this has been corrected on the template, but I am at a loss on what to do with about 50 loans that have this mistake

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TRID - TILA/RESPA Integrated Disclosures Rule
#2193440 - 09/21/18 08:49 PM Re: Disclosure issues Live 2 Comply
John Burnett Offline
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John Burnett
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Is this because you are billed a periodic fee by the tax service that isn't directly associated with each loan account, so that you retain the tax service fee at the bank and pay the tax service as an admin expense?

I don't think there is anything you can do to "fix" the closed files. The best you can do is get it right going forward.
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#2194230 - 09/28/18 09:37 PM Re: Disclosure issues Live 2 Comply
Live 2 Comply Offline
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Live 2 Comply
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So if some are within the 60 days, do we need to refund the fee and send revised CD?

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#2194349 - 10/01/18 07:52 PM Re: Disclosure issues Live 2 Comply
Live 2 Comply Offline
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Live 2 Comply
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Also we are billed the amount from a 3rd party sub-servicer for this.

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#2194406 - 10/02/18 02:06 PM Re: Disclosure issues Live 2 Comply
Live 2 Comply Offline
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Live 2 Comply
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So after doing some more research, I am more confused regarding this charge. This is what I found in some of the Q & A section from this website. Which is correct place for this fee: Section A or Section B?


TRID and the tax service fee
Answered by:

Jerod Moyer

Question:

On a secondary market loan where our loan servicer charges a tax service fee, should that be included in the origination charges section or services you cannot shop for?

Answer:
A tax service fee to a third party will go in Section B, Services You Cannot Shop For.

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#2194419 - 10/02/18 02:47 PM Re: Disclosure issues Live 2 Comply
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Which is correct place for this fee: Section A or Section B?

We show ours in section B payable to our vendor.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2194434 - 10/02/18 03:42 PM Re: Disclosure issues Live 2 Comply
Truffle Royale Offline

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We sell to investors and don't know at the time of closing which investor will get the loan. So the ultimate payee is not known which, if I'm reading the OP's post right, is their situation too.

This is what rclarey answered in another thread in March of 2017:

If you don't have the payee at the time of closing and this is for some future event, then I would say you would have to place this in Section A as payable to the creditor. You can't put fees in Section B, as you don't have a ultimate recipient and there are no provisions to disclose a recipient of a fee as TBD. If you do have the payee, then you would just list the average charge and the payee in Section B.

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#2194505 - 10/02/18 08:40 PM Re: Disclosure issues Live 2 Comply
Live 2 Comply Offline
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Live 2 Comply
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Hopefully I do not confuse myself. When I was asked this question, I assumed these were secondary market loans because of the mention of FreddieMac. However, I misunderstood. These are FreddieMac loans that we own. Because of our size we have to have a sub-servicer who handles the esrow etc. This sub-servicer company charges us $64 per loan for tax service fee.

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#2200214 - 12/10/18 03:46 PM Re: Disclosure issues Live 2 Comply
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In our case, the tax service fee is performed and payable to the investor purchasing the mortgage from us the creditor/Bank. Shouldn't the fee therefore be placed in Section B since the Official Interpretations say "Examples of the services and amounts to be disclosed pursuant to § 1026.37(f)(2) might include an appraisal fee, appraisal management company fee, credit report fee, flood determination fee, government funding fee, homeowner’s association certification fee, lender’s attorney fee, tax status research fee, third-party subordination fee......"?

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