TRID DISCLOSURE -NO ORIGINATION FEES

Posted By: ledfoot

TRID DISCLOSURE -NO ORIGINATION FEES - 04/25/18 08:18 PM

A customer has run into unexpected construction costs on his home. The lender is wanting to make him an additional loan for these costs but does not want to charge any origination costs to him. What is the proper way to disclose this on the LE and CD? Do you just not put any fees on them or do you disclose what would normally be charges and then show a lender credit for them?
Please advise!
Posted By: raitchjay

Re: TRID DISCLOSURE -NO ORIGINATION FEES - 04/25/18 08:20 PM

Just don't put an origination charge.
Posted By: raitchjay

Re: TRID DISCLOSURE -NO ORIGINATION FEES - 04/25/18 08:24 PM

It has never made any sense to me for a lender to "credit" themselves for a fee the bank (not some 3rd party, but the bank itself) isn't charging.
Posted By: ledfoot

Re: TRID DISCLOSURE -NO ORIGINATION FEES - 04/25/18 08:26 PM

Makes sense to me but just wasn't sure if there was something I was overlooking in RESPA or/and Reg Z.
Posted By: raitchjay

Re: TRID DISCLOSURE -NO ORIGINATION FEES - 04/25/18 08:29 PM

I don't think you're overlooking anything. We have loans here frequently with no origination charge (say an internal refi with no new money, so that we got the origination charge already on the first loan)......we simply don't have an origination charge. It's as simple as that IMO.
Posted By: John Burnett

Re: TRID DISCLOSURE -NO ORIGINATION FEES - 04/26/18 03:16 PM

Including the costs and an offsetting lender credit would probably cause your LOS to count the costs (or some of them) as PPFCs and goose the APR up. That would be an inaccurate disclosure because it would not reflect the terms of the loan agreement, which did not include those costs.