Skip to content

APR Paid by Lender-APR Fee from Borrower?

If an APR fee is paid at closing by the lender should it still count as a APR fee the borrower pays?

by Randy Carey:

No - it is not charged to the consumer.

1026.4(a) Definition. The finance charge is the cost of consumer credit as a dollar amount. It includes any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit. It does not include any charge of a type payable in a comparable cash transaction.


by Richard Insley:

"Paying" means giving money to someone else. Lenders can't "pay" anything by taking money out of one pocket and putting it in another.


by Richard Insley;

One more point--to be a FC, a payment must be required by the contract between the parties--not just paid. The controlling factor is the obligation to make payment, not the payment itself. When a lender notifies the borrower that lender will absorb a fee, that amends any prior legal obligation between the parties.

First published on 02/17/2019

Filed under: 
Filed under lending as: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics