Fee Disclosed in Section H as paid to the Lender

Posted By: bean2

Fee Disclosed in Section H as paid to the Lender - 10/12/21 05:40 PM

Section H of the CD reflects a fee paid to the lender. The fee is a Sanitary and Improvement District/Levy due at the time of closing. Is the lender permitted to place this fee in Section H as payable to the lender? Or should it be reflected as paid to the lender for benefit of the actual beneficiary?
Posted By: Truffle Royale

Re: Fee Disclosed in Section H as paid to the Lender - 10/12/21 05:59 PM

huh? How is what amounts to a government fee paid to the lender? The lender may collect the money at closing but they're not keeping it. They're forwarding it to the City/Town Sanity District, right? That District name is what must show on the CD as where the fee is being paid, not the lender.

If I'm misunderstanding, please explain further.
Posted By: bean2

Re: Fee Disclosed in Section H as paid to the Lender - 10/12/21 06:15 PM

Yes, you are correct. I have seen them do it as Lender XXX for benefit of the town of XXX. Which we have determined was acceptable. However, this one simply states the lender.
Posted By: John Burnett

Re: Fee Disclosed in Section H as paid to the Lender - 10/12/21 06:35 PM

You have a violation of the section 1026.38(g)(4) requirement tp disclose the "name of the person ultimately receiving the payment." You can cure it as a non-numeric clerical error under 1026.19(f)(2)(iv) if you are still within 60 days of consummation.
Posted By: John Burnett

Re: Fee Disclosed in Section H as paid to the Lender - 10/12/21 06:37 PM

If it's too late to do that, the best you can do is determine why the error was made and by whom, and take corrective action to mitigate the risk that it will occur again.
Posted By: bean2

Re: Fee Disclosed in Section H as paid to the Lender - 10/12/21 06:57 PM

Thank you, very much appreciated.