Answer:
This is a good question. This is being debated in the RESPA forum at BOL. Some investors require it to be in Block 3, while others want it in Block 1. There are two FAQs that seem to contradict each other:
FAQ #9 in the GFE-Block 1 section, states:
9) Q: What charges are part of the charge in Block 1 of the GFE, ―Our origination charge?
A: Block 1, ―Our origination charge‖ on the GFE contains all charges for origination services performed by or on behalf of a lender and/or a mortgage broker. Origination services includes, but is not limited to, the following: taking of the loan application, loan processing, underwriting of the loan, funding of the loan, acting as an intermediary between a borrower and lender, obtaining verifications and appraisals, and any processing and administrative services required to perform these functions.
While FAQ #5 in the GFE-Block 3 section, states:
5) Q: What Block on the GFE should contain a charge from the borrower’s employer or banking institution for the verification of employment (VOE) and the verification of deposit (VOD)? A: If the loan originator knows at the time it provides the GFE that there will likely be a charge by the borrower's employer or banking institution for the VOE or VOD, the amount of that charge should be estimated in Block 3 of the GFE.
I emailed HUD on this issue and received the following response:
David,
The charge for a Tax Transcript from the IRS, associated with Form 4506T, is included in Block 1, and is not separately itemized.
David L. Friend, Esq.
Office of RESPA and Interstate Land Sales
Department of Housing and Urban Development
However, Mr. Friend doesn't explain why or how to reconcile the two FAQs. I have asked for more information so watch this thread. This would be a prepaid finance charge.
First published on BankersOnline.com 9/20/10
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