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Disclosing a Credit with the Application Fee

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Question: 
On the GFE, we charge a point to buy down the rate: this gets disclosed in Block 2 Box 3 (i.e., $1000 point to buy down the rate). We pay the appraisal fee (i.e., $400) which is listed in Block 3. The credit for this charge (the appraisal fee) is supposed to go in Block 2, Box 2. According to the regs, we can only choose one box in Block 2, but we have a charge and a credit (if we combine the two amounts, this would result in a net charge of $600). It renders the APR and Amount Financed incorrect on the automated system we are using. How do we disclose the credit for the $500 application fee, or do we not have to disclose the charge? Even though this is not a “no cost” loan, everything that we are reading seems to state that we have to disclose all fees associated with the loan no matter who pays. If the bank pays, it has to be listed as a charge and credited.
Answer: 

You are correct in that all charges must be disclosed and, if appropriate, credited back. This sounds like a problem with your automated document preparation system and you should be talking to your vendor.

First published on BankersOnline.com 11/22/10

First published on 11/22/2010

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