I am reviewing some loan files and have a question regarding a mortgage that originally started as a preapproval now an application. Does the preapproval fee go on the GFE and HUD and if so, what line? Would this be a finance charge? Thanks.

1. Yes. In the 800 series.
2. Yes, this is a finance charge. The only exception would be if you charged it to all potential applicants (that want a preapproval). Then it would be exempted as an "Application Fee". But there can be no exceptions.

David, not that I disagree, but do you think that a pre-approval fee is the equivalent of an application fee as defined in Reg Z? You can separate different loan programs, i.e., auto loans verses mortgage loans, but do you really think that would extend to a preapproval fee on a mortgage loan when I am not charged the fee unless I wanted a preapproval?

Just curious as to your thoughts....

I personally have never heard of a fee specifically for this before.