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#2239992 - 07/22/20 07:53 PM Lender Pays fees
Dodge Offline
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Joined: Mar 2010
Posts: 266

We are paying all closing cost for a customer, and I haven't done a LE on a situation like this. I looked it up but I want make sure before we send it out. Based on Q&A #3 under Lenders Credit on the CFPB FAQs we can leave all the fees off the LE?

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TRID - TILA/RESPA Integrated Disclosures Rule
#2239993 - 07/22/20 07:58 PM Re: Lender Pays fees Dodge
Dan Persfull Online
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
That's correct. You only need to disclose the fees the borrower will have to pay such as escrow deposits, taxes, insurance, prepaid interest.
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#2239995 - 07/22/20 08:07 PM Re: Lender Pays fees Dodge
John Burnett Offline
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John Burnett
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Cape Cod
When you get to the closing disclosure, though, you will have to show ALL the costs, regardless of who has paid/will pay them, and show the dollar amounts for those the bank pays in the "Paid by Others" column.
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#2275497 - 09/13/22 06:11 PM Re: Lender Pays fees Dodge
Tarhe Offline
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Joined: Nov 2006
Posts: 1,403
California
Just to be sure I understand . . . We are doing our first VA loan and there are a number of fees that the veteran cannot pay. Some are bank fees (Administration Fee; Doc Prep Fee) and some are third party fees (electronic verification of employment, tax transcripts, etc.). From what is stated above, we leave all of those off the Loan Estimate so that the LE reflects only the fees that the borrower will actually be responsible for. And then on the Closing Disclosure, we list ALL fees (bank and third party fees), and show “Paid by Others” for all of the fees that the bank will absorb, correct?

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#2275500 - 09/13/22 06:22 PM Re: Lender Pays fees Dodge
Dan Persfull Online
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
That is correct. The LE discloses fees the borrower will be responsible for. The CD discloses the cost of the loan regardless which party paid the cost.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#2275501 - 09/13/22 06:23 PM Re: Lender Pays fees Dodge
Tarhe Offline
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Joined: Nov 2006
Posts: 1,403
California
Thank you for confirming!!

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#2275509 - 09/13/22 07:05 PM Re: Lender Pays fees Dodge
Tarhe Offline
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Joined: Nov 2006
Posts: 1,403
California
When a fee is a bank fee that the bank cannot charge the veteran (the bank’s Doc Prep Fee for example), should we leave it off the LE and the CD? Or because it would typically be a cost of the transaction, do we show it on the CD with the bank absorbing it? I’m thinking yes (show it on the CD) but want to make sure we still need to disclose it on the CD and not just leave it off entirely for both the LE and CD. Thank you!

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#2275517 - 09/13/22 07:45 PM Re: Lender Pays fees Dodge
rlcarey Online
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rlcarey
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Galveston, TX
All third party fees have to be shown on the CD regardless of who is paying it. Have you looked at VA Circular 26-17-11?
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#2275518 - 09/13/22 07:49 PM Re: Lender Pays fees Dodge
Tarhe Offline
Diamond Poster
Joined: Nov 2006
Posts: 1,403
California
Thank you! I was not aware of that VA Circular - just what I needed. I will take a look - thanks again!

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