RESPA: How do you provide full disclosure of third party fees when the amount is unknown?

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Question:

For consumer construction loans that are RESPA related, how do we complete the HUD 1 regarding full disclosure of third party fees, for example inspectors, if we close prior to knowing who will be performing the inspections?

Answer:

You would have to base the disclosure on the expected number and cost of inspections. But first, look at whether the loan is exempt from RESPA disclosures. Constructions loans and other short-term loans (less than 2 years) are exempt from the HUD-1 disclosure requirements.

First published on BankersOnline.com 3/11/02