A little help,

1026.38(o)(1) states that the “Total of Payments,” is the total the consumer will have paid after making all payments of principal, interest, mortgage insurance, and loan costs, as scheduled.

If an amount as been disclosed as a loan cost and the consumer then decides to finance the closing cost so that it's reflected in their loan amount and therefor paid through their payments of principal & interest, would an adjustment to Total of Payments be required?

Based on my reading of the rules the calculation for "Total of Payments" does not change if the loan costs are financed. Loan costs are included in the "Total of Payments" calculation regardless. See 1026.38(o)(1) Comment #1 which refers to the calculation at 1026.37(l)(1)(i) Comment #1, which says in relevant part "The amount disclosed ... is the sum of principal, interest, mortgage insurance, and loan costs ... . ... Loan costs are those costs disclosed pursuant to §1026.37(f)."

Thank you Docs!

Think of it as a "you pay me now or you pay me later" situation. If the closing costs are financed, their payment is deferred, but they get paid.