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#353411 - 04/29/05 05:37 PM Disclosing Flood fee as F/C when Life of Loan incl
Miss Kitty Offline
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Joined: Mar 2002
Posts: 721
I would like your thoughts regarding Flood Cert fees when you have a Life of Loan included with your total.

There is no questions that the Flood Search itself is a finance charge, and the Life of Loan portion is a Prepaid f/c. Management has chosen to not show this as a P/P F/C because the bill received does not break down what is the search and what portion is the life of loan.

Please give me your opinion as to how you think this should be disclosed.

Thank you

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#353412 - 04/29/05 05:40 PM Re: Disclosing Flood fee as F/C when Life of Loan
Andy_Z Online
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The Cert fee may be excluded. The LOL fee must be included. You can opt to include it all.

OSC - 12 CFR Section 226.4 Finance Charge
3. Charges assessed during the loan term. Real estate or residential mortgage transaction charges excluded under ยง226.4(c)(7) are those charges imposed solely in connection with the initial decision to grant credit. This would include, for example, a fee to search for tax liens on the property or to determine if flood insurance is required. The exclusion does not apply to fees for services to be performed periodically during the loan term, regardless of when the fee is collected. For example, a fee for one or more determinations during the loan term of the current tax lien status or flood insurance requirements is a finance charge, regardless of whether the fee is imposed at closing, or when the service is performed. If a creditor is uncertain about what portion of a fee to be paid at consummation or loan closing is related to the initial decision to grant credit, the entire fee may be treated as a finance charge.
My opinions are not necessarily my employers.
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#353413 - 04/29/05 06:31 PM Re: Disclosing Flood fee as F/C when Life of Loan

You can ask your vendor to break it down for you. Ours is the basic price, plus $2 for the LOL service.

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