Total Loan Costs vs Points and Fees

I need some clarification about when Points and Fees would be reported instead of Total Loan Costs. The company I work for only originates conventional first lien mortgage loans and we recently started accepting applications for investment properties.

I am not as familiar with Reg Z as I am with Reg C, but I thought I understood how the Fees for HMDA were reported based on how Reg Z applied to the loan. Total Loan Costs is reported when both TRID and Ability to Repay apply to the loan, but the Total Points and Fees should be reported if TRID does not apply and ATR does.

Where I'm now confused is on these Investment properties, we are getting NA for both Total Loan Costs and Points and Fees. I thought that if I wasn't reporting one of them, I should be reporting the other. So I started digging into Reg Z a little bit.

The reading that I have done on Reg Z indicates that the Ability to Repay does not apply to Investment (business purpose) loans, so I assume that this is why I'm getting NA for both the Loan Costs and Points and Fees. If that is accurate and we do not report Points and Fees on investment property loans, then what types of loans do you report Points and Fees for?

You would report points and fees for loans subject to Reg. Z that are not subject to 1026.19(f). IOWs. non TRID loans such as loans subject to 1026.32, .35 & .43 that are secured by the consumer's (primary for .32 & .35) dwelling. .43 applies to any consumer purpose loan secured by a dwelling owned by the consumer, regardless if it's a rental dwelling.

Yes, but if the loan isn't subject to Reg Z at all (non-owner-occupied rental property, loan to acquire, improve or maintain same), no part of Reg Z will apply, and you won't report total costs or points and fees in HMDA.

And that is true even if the lender delivered TRID-like disclosures that included total costs and/or points and fees.

I need to rephrase to make sure that I understand.

1026.43 only applies to a dwelling secured loan, regardless of the occupancy, if the loan is for consumer purpose. Therefore if the loan is determined to be for business purpose then 1026.43 does not apply at all. AND if 1026.43 does not apply then you report NA for both Total Loan Costs AND Total Points and Fees.

I will read up more on TRID/Reg Z to understand the rest better. I still can't put a scenario to the requirement for reporting Points and Fees, but I feel better about not reporting either on our Business Purpose Investment Properties.

Thank you both for the information.

I still can't put a scenario to the requirement for reporting Points and Fees,

You finance a mobile home for the consumer with no real estate.

Thank you Dan!