Lender Credits on Loan Estimate

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Question:

How do lenders disclose specific Lender Credits on the Loan Estimate? My bank does NOT offer GENERAL lender credits for secured home improvement loans but we do not charge the borrower for a title search ($60) or for a flood report ($10). Which of the following ways do we disclose such SPECIFIC credits? (1) The bank should itemize these fees on page 2 of the Loan Estimate and then show a Lender Credit of -$70 to offset these fees. Later, the Lender Credit row on the Closing Disclosure will be blank since these two specific credits would show under the column "Paid by Others." Thus, Lender Credits will be -$70 on the Loan Estimate but later blank on the Closing Disclosure. (2) Since these two lender credits are specific and are equal to the fees the bank pays to the title company, the two fees would NOT appear on the Loan Estimate and Lender Credits would be blank on the Loan Estimate. However, the Closing Disclosure will itemize these two fees as "Paid by Others" with the Lender Credit row on the Closing Disclosure being blank. (3) Some other way instead of option 1 or 2.

Answer:

by Randy Carey: If the applicant is not going to be legally responsible to pay the fees, they are not disclosed on either the LE or CD.

Answer:

by John Burnett: If at the time of preparing the Loan Estimate you expect that the fee will not be paid by or imposed upon the consumer, omit it from the Loan Estimate. On the Closing Disclosure, if the consumer is obligated to pay a fee (but you have determined that you will pay it), list the service and cost, putting the cost in the "Paid By Others" column. If the consumer is not obligated to pay for a service, you can omit it.