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Boss Wants Answer Straight from the Reg

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Question: 
Regarding the new changes that went into effect 1-1-2010, the one that I am having an issue with is the charges that are supposed to be listed on the new GFE. I told my boss that all charges that are related to a residential one to four family real estate loan, have to be listed on the GFE whether or not we are going to actually charge them. He states there is no reason why if we know up front that we are going to charge one of the fees, why we should have to list it on the GFE. I told him that the new changes state that we have to do this, so I have to have prove where the reg actually states this. He said he isn't going to go by someone's opinion of the reg (such as from a seminar/webinar). He wants it straight from the reg, so am I correct in stating this? If so, please provide me the reg that states this and the explanation.
Answer: 

Because HUD wrote this regulation poorly, you actually have to look at several places and put them together. I have quoted the regulation (in italics) and then added my comments below it.

The standardized GFE form does not allow information to be included on any part of those totals that would be paid outside of closing. Such information would not help borrowers to shop for loans and would not facilitate comparison of the charges on the GFE with the charges on the HUD-1. [RESPA FAQ - GFE General #13]
Even if it is paid outside of closing or you/they already have it, it must still be listed. This would include credit reports, flood determinations and appraisals the bank already has. This also includes hazard insurance on a refinance/home equity loan.

The loan originator must list all required third party services on the GFE and HUD-1 regardless of whether the charge is paid by the borrower, seller, loan originator or any other party (except for administrative and processing services). [RESPA FAQ - GFE General #32]
No matter who pays for it (even if the lender doesn't pass on the charge to the borrower), the fee must still be listed. Remember, you don't list anything as POC on the GFE (first quoted paragraph).

If the borrower typically would incur charges for title services and lender’s and owner’s title insurance, the GFE instructions make it clear that those charges are required to be listed regardless of whether, for example, the contract requires the seller to pay for the service.<?i> [further illustrated by RESPA FAQ - GFE Block 5 #2]
The purchase agreement has no influence on the GFE. You list everything needed to close the loan at 100% (such as title insurance).

First published on BankersOnline.com 5/24/10

First published on 05/24/2010

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