Borrower sells their home and purchases a new home using the same title company, and the sale and purchase are back-to-back closings. Profit from the Borrower's sale of their home stays with the title company and is fully applied to Borrower's new home purchase.

Should Borrower's profit from their home sale be shown in Section L of the CD? If so, why is the home sale treated differently than if the Borrower sold stock and used those funds for the new home purchase?

If the funds are being provided from the title company from the simultaneous sale, I would not have any real problem showing that as a Section L entry. That would make the cash to close from the borrower equal to the check they need to show up with at the closing table. Sort of like disclosing subordinate financing.