This is a very elementary question (or so I thought) in regard to itemizing charges on the HUD. I am arguing with my lenders over this and I want to make sure I’m not losing my mind. We currently disclose an “Administration Fee” of $850. The $850 admin fee covers the following fees: doc prep, underwriting, flood cert, credit report, inspection fees, and wire fees. I say and have always been taught that we need to specifically list out all of the fees and to whom they are ultimately paid, even if not passed on. However,the lenders are insisting that nobody does it that way in the industry and say that everyone has an admin fee and lumps it all into one category. Is it not required per Appendix A to 24 CFR 3500 that all of these charges should be specifically listed even if the bank does not pass them on?!?!

The instruction state that "Charges to be paid outside of settlement, ............, shall be included on the HUD-1 but marked ``P.O.C.'' for ``Paid Outside of Closing'' (settlement) and shall not be included in computing totals."

What part of that do they not understand. Heck, the regulators (well FDIC anyway) make you disclose the property insurance payments as POC on refinances even though the insurance is already in place.

If you have the Q&A to the Mass. Banker's Association (I'm not sure how to link it), take a look at the answer to #13. It discusses this same thing in regards to an application fee - the charges have to be disclosed

HUD's Response to the MBA

Thanks for your responses--this is why I love BOL (it helps assure me that I'm not losing my mind!!)