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Reg Z “Paid Outside of Closing” Costs

I'm looking for clarity concerning Reg Z and documenting a borrowers payment of costs on the Closing Disclosure that are paid outside of closing. Specifically, fees for optional services like a Whole Home Inspection, Radon, etc. that a lender does not require. I thought there were separate rules for optional services? Reg (i) Charges that are not paid from closing funds but that would otherwise be disclosed in the table described in paragraph (k) of this section, should be marked with the phrase “Paid Outside of Closing” or the acronym “P.O.C.” and include a statement of the party making the payment.

Optional services would be reflected in Section H in the borrower paid before closing column and not in the Borrower's Summaries of Transactions which you are quoting.

First published on 03/15/2020

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