We have a borrower doing a cash out home equity loan. The purpose of the loan is short-term financing to purchase a new primary residence. The borrower would like to pay the closing costs in cash. The formula used for the cash to close table is showing the "net" cash to the borrower. Would it be incorrect to show a payoff/payment of the loan funds to the title company? Essentially wiring the money to the title company and they would then cut a check to the borrower for the full loan amount. I've included the two cash to close scenarios we are debating below (we are using the alternate form CD.) Please let me know your thoughts. Thanks!

Option A:
Loan Amount $249,000
Closing Costs $2,490
Closing costs before closing $0
Total Payoffs and Payments $249,000 (payment to title company)
Cash from Borrower $2,490

Option B:
Loan Amount $249,000
Closing Costs $2,490
Closing costs before closing $0
Total Payoffs and Payments $0
Cash to Borrower $246,510

Unless you collect it upfront TRID does not support this scenario. They can bring a check to the title company and the title company can cut them a check for the full amount, if title agrees. But in reality, you give me a half dollar and I give you a quarter back, the bottom line is that cash to close equals 25 cents to me. You aren't paying the title company on behalf of the borrower.

That being said...option B would be the correct presentation under TRID?

And one quick correction, we are closing the loan in-house, not at a title company. The borrower is requesting the wire to go to the title company for the new purchase. Change the scenario at all?

Option A