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#1776839 - 01/16/13 04:22 PM Construction Fees on HUD
Kelsey D Offline
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Ohio
For construction loans, we collect inspection and survey fees at closing. These services are performed by a third party, but we occasionally do not know yet which third party will do them. Who do we list as the recipient of the fees on the HUD?
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#1777127 - 01/16/13 11:13 PM Re: Construction Fees on HUD Kelsey D
rlcarey Online
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Galveston, TX
At closing, they are being paid to the bank.
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#1777183 - 01/17/13 01:30 PM Re: Construction Fees on HUD Kelsey D
Kelsey D Offline
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Ohio
Would we have to include them in line 801 then as lender inspection fees, even though ultimately they end up going to a third party? We've been putting them in block 3 of the GFE. Should it be block 1?

When we do know who the service provider will be, can we list them in block 3 of the GFE and the HUD 800 series (not 801) with the name of the third party even though we will be receiving the fees at closing?
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#1777186 - 01/17/13 01:39 PM Re: Construction Fees on HUD Kelsey D
rlcarey Online
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2) Q: Where does the loan originator put the lender‘s processing fee on the GFE?

A: All loan originator charges—including processing, application, administration fees, underwriting, document preparation, wire, lender inspection, mortgage broker, loan handling, and other miscellaneous fees—are contained in Block 1, "Our origination charge".

It would be no different than having an attorney prepare your loan docs.
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#1777199 - 01/17/13 02:03 PM Re: Construction Fees on HUD Kelsey D
Kelsey D Offline
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Ohio
I've come across threads such as this one, which is why I thought these fees may not be origination charges.
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#1777203 - 01/17/13 02:12 PM Re: Construction Fees on HUD Kelsey D
rlcarey Online
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rlcarey
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That post was from pretty early on in this process.
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#1777205 - 01/17/13 02:16 PM Re: Construction Fees on HUD Kelsey D
Kelsey D Offline
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Ohio
Just to clarify, so even if we know who the third party servicer is who will perform the inspections, if we are receiving the fee at closing, it is an origination charge in block 1/line 801?

Thanks for you help, Randy.
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Don't make me say, "I told you so!" Sincerely, your friendly Compliance Officer.

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#1815530 - 05/17/13 07:01 PM Re: Construction Fees on HUD Kelsey D
lucyc Offline
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Now I'm confused but the thread included below states Block 3

http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1781079

So,if I have a construction loan, and there are 12 anticipated draws, we collect 14 inspection fees at closing (always two extra for unanticipated extra inspections) and this is not income to us. It is fully paid to third party inspectors, based on invoices, after they perform the inspection and we fund the draw. In the event we did not do 14 inspections, say only 13, than after construction is complete, the extra $300 is refunded to the Customer. Should these fees be included in Block 1 or Block 3?

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#1815572 - 05/17/13 08:01 PM Re: Construction Fees on HUD Kelsey D
lucyc Offline
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To further clarify, we do not fund draws to pay inspection invoices. That estimated money is collected from the Borrower at closing and held in a GL account for construction inspection fees and is not funded from any loan proceeds or draws. Similar to an escrow account, we hold the money for progress disbursement to third parties and refund anything left over to the Borrower.

The current practice is to disclose the estimated third party inspection fees in Block 1, however, the discussion is whether that is appropriate since this is not an income to the Bank but rather a third party fee that the Bank collects and disburses, much like an appraisal fee or insurance and tax escrows.

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#1815595 - 05/17/13 08:25 PM Re: Construction Fees on HUD Kelsey D
Dan Persfull Offline
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Bloomington, IN
If you are paying a third party to perform the inspections the fees would go in Block 3. If the financial institution is preforming the inspections the fees go in Block 1.
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#1937088 - 07/01/14 08:29 PM Re: Construction Fees on HUD Kelsey D
Luvinit Offline
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where should the construction draw fees or disbursement endorsement fees charged by the title company be shown on teh GFE & HUD?

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#1937254 - 07/02/14 02:07 PM Re: Construction Fees on HUD Kelsey D
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Block 4 and Line 1101.
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