Please be patient with me.

I am still having trouble reconciling the RESPA FAQ to the July RESPA Roundup – this is true even after reading much discussion in these threads.

We are still handling OTI the same way we did it when the new RESPA rules went into effect in January because I was waiting for more clarification - or something - from HUD. This is what we do (which I believe follows instructions in the FAQ):
A) Always put OTI on the GFE for home purchase loans.
B) Put OTI in the borrower’s column on the HUD-1.
C) Show a credit for OTI in the 200 Series and a charge to the seller in the 500 series.
D) The comparison chart contains amounts in the GFE and HUD column for OTI.

Our Software vendor seems to be making changes to comply with the RESPA Roundup which says:
“If the consumer did not purchase a service that was listed on the GFE (usually owner’s title) there should be nothing entered in that line on Page 2 of the HUD-1 and the estimate of the charge should not appear on the comparison chart on Page 3 of the HUD-1.”

1) Is the “consumer” in this case our borrower or does it mean any consumer (seller) associated with the loan?
2) Is HUD saying to show the OTI in the Seller’s column of the HUD-1?
3) Does HUD still expect us to put the OTI on the GFE for a purchase?

We usually pay for the flood determination rather than passing the fee to the consumer. We handle it basically the same way we do the OTI.
•Does this also fall off of the comparison chart now?

What I want to ask is Why? Why? Why? But I know it’s pointless so I won’t.

1) Is the “consumer” in this case our borrower or does it mean any consumer (seller) associated with the loan?

If OTI is purchased, it goes in the borrowers column regardless of who pays for it.

2) Is HUD saying to show the OTI in the Seller’s column of the HUD-1?

No

3) Does HUD still expect us to put the OTI on the GFE for a purchase?

ABsolutely


•Does this also fall off of the comparison chart now?

No, it appears in the borrowers column and is credited back to the borrower by the bank. There seems to be 2 schools of thought on this, either through Box 2 on the GFE or in the 200 series on the HUD-1.

So, if I understand you, OTI only comes off the comparison chart if it was on the GFE but it was not purchased for the transaction either by the seller, borrower or some other third party.

Correct. You cannot pad your tolerences with services that the customer did not use:

"If a service that was listed on the GFE was not purchased, what should go into the borrower’s column on Page 2 of the HUD-1 and on the comparison chart on Page 3 of the HUD-1?

If the consumer did not purchase a service that was listed on the GFE (usually owner’s title) there should be nothing entered in that line on Page 2 of the HUD-1 and the estimate of the charge should not appear on the comparison chart on Page 3 of the HUD-1."

Thanks. I guess what confuses me is the word consumer, because my consumer customer did not purchase the OTI. The seller did. We'll continue as we have been and stop worrying.

If the seller pays for the OTI, it still shows as if the borrower paid for it on page 2 of the HUD-1.

Think about it this way Bville...if it's truly not purchased at all, by anybody, it won't go in the comparison. Therefore, not "padding" your 10% fields.