We are going to start having any new mortgage loans we make have a payment due date on the 1st of the month. How do we disclose that if the loan closes on the Jan.15th and the due date is Feb. 1st we'll be collecting the interest from Jan. 15 to Feb. 1st. Also does that make the first full payment due Feb. 1st or not until March 1st? As a related question, does anyone do this and use the 30/360 calculation?

In your example, a loan closing Jan 15 would not generally have a first payment until March 1. On the GFE you would show 16 days advance interest (1/15-1/31)and then the regular monthly payment of 3/1 will pay interest in arrerras for February (yes 30/260).

The anon poster above is correct. Most all mortgage loan processing packages and general ledger applications have residential mortgage loans on a 30/360 accrual basis and collect intererst in arrears for the previous month. In your example, the 1st payment date for a loan closed on 1/15 would be 3/1 with prepaid interest for the period 1/15-1/31 collected at closing.

What if the loan closed Jan. 5? Doesn't the first payment have to be 30 - 45 days from closing?

If it closed Jan 5, you could give the borrower an interest credit (4 days) and have 1st payment due on 2/1

On line 901 of the HUD do I disclose a negative odd days interest then and would I subtract this from the finance charge in the FEDBOX?

Yes on question one-as for the negative finance charge, there was a thread in here recently about that subject-If i recall, the overall opinion was there is no negative finance charge, but dont hold me to it. FWIW, I ran some scenarios with the interest credit and the apr didnt change.