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#2243927 - 10/12/20 04:37 PM Seller Obligated Fees
CMSIngenue Offline
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Can we add an origination charge and avoid tolerance violations if the fee is seller obligated per the purchase contract?

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TRID - TILA/RESPA Integrated Disclosures Rule
#2243930 - 10/12/20 05:01 PM Re: Seller Obligated Fees CMSIngenue
rlcarey Offline
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rlcarey
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Galveston, TX
Let's see if I have this straight. You did not list an origination fee on the initial LE. Later it was noticed that the seller had agreed to pay for an origination fee, if there was one. So, you want to add an origination fee to the loan so that the seller pays for it?

Well, outside of the UDAAP and fair lending implications - sure, why not smile

Or you always charge an origination fee and actually had a copy of the purchase contract in hand at that time and treated this as a specific seller credit when you issued the initial LE?
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#2243935 - 10/12/20 05:46 PM Re: Seller Obligated Fees rlcarey
CMSIngenue Offline
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This is a weird fact pattern Their is very sizable general seller credit. Their is excess sell credit. Rate is already locked and disclosed at par to borrower. Borrower wants to lower the interest rate. LO wants to make sure the borrower gets the full benefit of the seller credit.

The investor (Bond program) permits the rate to be reduced but charges an "origination fee" for the reduction in interest rate. I think this should be disclosed as a discount point. But investor says it must be origination fee.

Trying to reconcile TRID with investor's position and the LO who wants the borrower to be able to use the full benefit of a seller credit to lower their interest rate.

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#2243937 - 10/12/20 06:17 PM Re: Seller Obligated Fees CMSIngenue
rlcarey Offline
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rlcarey
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Galveston, TX
Sounds like you need to work that out with the investor, but if this is a borrower request for a lower interest rate which the seller is going to be responsible for paying for, not sure where the harm to the borrower comes in. I am at a loss as to how an investor gets to charge a loan origination fee to be assessed to the borrower however for lowering an interest rate. It is not an interest rate dependent charge.
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#2243941 - 10/12/20 08:05 PM Re: Seller Obligated Fees CMSIngenue
Truffle Royale Offline

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Watch the wording of the offer to purchase. The borrower may want to get an attorney involved. Paying $100 credit is different than paying 'up to' $100. Also, your LO is dangerously close to crossing the line and acting like an attorney in wanting to make sure the borrower gets the full benefit of the seller credit. That's not any part of doing a loan.

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#2243945 - 10/12/20 08:25 PM Re: Seller Obligated Fees CMSIngenue
rlcarey Offline
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rlcarey
Joined: Jul 2001
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Galveston, TX
TR has a very good point.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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