Posted By: Anonymous
HUD SETTLEMENT STATEMENT - 12/30/03 09:48 PM
We have been doing 100% Financing where we finance 80% and an affiliate company finances 20%. We disclose all fees on the first mortgage Hud Settlement Statement, therefore eliminating the 2nd Mortgage HUD. Is this O.K. We are now being told from the affiliate finance company that this in non compliant. Is this true? We have been doing it this way for years.
Thank you
Posted By: Rocky P
Re: HUD SETTLEMENT STATEMENT - 12/30/03 11:08 PM
IMO Appendix A of RESPA provides guidance. It refers to the name and address of Lender for Section F, and for line 202 the "amount of the new loan made by Lender".
If there was one note/loan and you immediately participated 20% liability to the affiliate, then it would appear to be OK. If there were multiple loans then I believe the affiliate finance companyis correct.
Why wasn't it caught before? Examiners are good but there are many things to look at during an exam. Their priorities may have been elsewhere.