When an institution collects for an Application Fee at time of application, can it be posted on the HUD-1 as a POC and then credited to the borrower on the front of the HUD-1? I only can find an answer regarding if the fee is for other services, which I found in MBA Queston 13 to HUD.

Yes, but why would you be crediting it back?

The fee is an upfront fee we credit back to closing costs if the borrowers go through with the loan.

Then, I would show the closing costs it is being applied to as being POC. We collect a $325 "application fee" - $250 for the appraisal, $50 for the CBR and $25 for the FZD - we show these items POC on the HUD settlement statement.

Out of curiosity - if you over or under collect, how do you show the line item? We currently show an adjustment to "0" out the POC if needed (front page as credit, 2nd page as charge).

Very seldom will we over or under collect - The RMCR CBR is always $50, the FZD is always $25 and all in county appraisals are $250 and out of county $300 (we collect an additional $50 at application if out of county).

However, on the rare occasion we do over or under collect we make the appropriate adjustment.

We under collect (property wound up being out of county) -

We will show

803 - $300 $250 POC $50
804 - $50 POC
808 - $25 POC

or

803 - $300 POC
804 - $50
808 - $25 POC

If we over collect -

basically the same as above except we will apply the overage toward another cost.

We charge a flat $500 fee. We apply to title, flood, tax service, appraisal, recording ees, reconveyance, etc.
If there is any money left, we keep as a loan origination fee. We do not require them to pay up front, it's taken out of the loan proceeds or included in the amount financed.
Do we disclose everything on the GFE and Hud 1-a as POC?

Quote:

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We do not require them to pay up front, it's taken out of the loan proceeds or included in the amount financed.
Do we disclose everything on the GFE and Hud 1-a as POC?

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No, you are collecting the fee at closing, not outside of closing.

So I disclose on the HUD as "normal" charges but on the GFE I don't know what all the charges will be yet, even if we will require an appraisal but no matter what it's gonna cost them $500 at closing so on the GFE can I place the entire $500 as a loan origination fee and then do the breakdown on the HUD?

On the Good Faith, we quote the normal maximum costs. If we run electronic underwriting and we can use a lesser appraisal, then the true cost is reflected on the HUD-1. As an example, a form 470 appraisal on a normal 1-4 family normally runs $400 (goes on GFE). If we run our AUS and it calls for a 2070 limited appraisal that costs $250.00, then that is quoted on the HUD. Unfortunately we do not always know what the true costs needed for the deposit fee is because the fees will vary with the loan.

Help!
What if the credit bureau fee is not truly known at close? I want the HUD to be as accurate as possible, but the final billing does not arrive until after close.

You don't receive flat rate credit reports. Sounds like you need a new vendor or a new contract.

thanks for the quick response. I'll check with my lender to see what is really up.