Answer:
Answer by Dan Persfull:The definition of a prepaid finance charge can be found in Reg. Z at 226.2(23). The definition of a finance charge is in Reg. Z at 226.4(a)(1). Examples of prepaid finance charges can be found in the Reg. Z Official Staff Commentary to 226.23(a)(23).
Answer:
Answer by Richard Insley:When you withhold it from proceeds, you upgrade a garden-variety finance charge to a prepaid finance charge. This can happen at closing (points, prepaid interest, etc.), and at any other time proceeds are being disbursed (netting construction inspection fees from draws, for example.)
First published on BankersOnline.com 1/23/06
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