The banks Mortgage Dept wants to offer to $500 off of closing costs through a specfic date. In my opinion, this needs to be shown on the HUD-1 as "paid by lender" and not in the total. Is this correct?

On the HUD1 we show all the fees on the 2nd page as we normally would (appraisal, credit etc) and then show a "lenders credit" and the $ amount on the first page, buyers side in one of the blank lines in the 200 section (Amounts paid by or in behalf of borrower)