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#2255222 - 06/12/21 08:43 PM CFPB TRID FAQ-Creditor absorbing costs/Disclosure
Puzzled Offline
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Joined: Dec 2012
Posts: 157
Our residential lending manager wants to take most LE/CD section B fees and add them to a processing fee that will be increased by the amount of the fees and be disclosed in section A of the LE/CD. She wants to do this to simplfy the disclosure process. There was a similar post on this subject. https://www.bankersonline.com/forum...fee-increased-to-cover-other-fees#UNREAD

I have an additional question related to this proposal not covered in the prior post.
1. In looking at the CFPB's TRID FAQ Questions #3 and #4, it appears that absorbing fees is referring to a lender "eating the fees" as a cost of doing business rather than taking fees from what section of the LE/CD and adding them to an existing processing fee. (the fees are still being charged). Does this guidance apply if we are absorbing the fees into another fee? I am asking this question because I am getting mixed answers on this question. I had a compliance service say the guidance does apply and a FDIC examiner saying it does not apply.

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TRID - TILA/RESPA Integrated Disclosures Rule
#2255223 - 06/13/21 12:43 PM Re: CFPB TRID FAQ-Creditor absorbing costs/Disclosure Puzzled
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
So you are saying, for example, that you want to charge a $750 processing fee in section A and not list a $500 appraisal, $50 credit report, $25 flood search and a $175 doc prep fee in Section B?

I see no problem with that, except you turning those charges from not being prepaid finance charges into a prepaid finance charge and raising your APR.

Also, if you run into a changed circumstance, that for example causes your appraisal fee to go up, you are gong to be stuck with it

You will still have to itemize them and their exact dollar amounts as paid by lender on the CD.
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#2255224 - 06/13/21 05:48 PM Re: CFPB TRID FAQ-Creditor absorbing costs/Disclosure rlcarey
Puzzled Offline
100 Club
Joined: Dec 2012
Posts: 157
Yes, that is what the residential lending manager is wanting to do and I have brought to her attention that the fee will be considered a prepaid finance charge and will raise the APR/cause more loans to be classified as higher priced as well. I am not seeing much benefit with doing this with having to itemize them out on the CD. Good point on the changed circumstance.

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