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About Loan Fees

Answered by: 
Dan Persfull

Question: 
Would a settlement/closing fee from the title company be a pre-paid finance charge? I say no, but another bank officer says yes. Please advise. Also, using the new GFE/HUD, if we are doing re-fi of an existing loan, using the original flood and credit report, would it be necessary to still show fees for those services, but show POC? Again, I say no, but other officer says yes.
Answer: 

Review the Commentary to Reg. Z 226.4. You will find the following:

A charge for conducting or attending a closing is a finance charge and may be excluded only if the charge is included in and is incidental to a lump-sum closing fee excluded under Section 226.4(c)(7).

You have two options:

  1. Show the FZD and credit report fee in Block 3 and a credit in Block 2 of the GFE.
  2. Do not show a credit in Block 2 and carry the fees forward to the borrower's column on the HUD 1 and provide a credit for them in the 200 series.



First published on BankersOnline.com 7/19/10

First published on 07/19/2010

Filed under: 
Lending
Filed under lending as: 
Credit Report
Fees
Finance Charge
Flood
HUD

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