So, if you have a credit and a charge, you are netting all of that out and showing it either in box 2 or box 3?

I have thought all along that Box 3 (because it uses the term "points") has been refering only to discount points...ugh.

If you require PMI on a loan and you select the PMI company, but you are not collecting any PMI premium at closing, do you need to disclose private mortgage insurance in Block 3 of the GFE?

David! or anyone - I guess I can't apply logic where the survey charge would be shown on the HUD when Letter C would apply to us. I thought it would go under 1303 but a title company said they thought it would be itemized in the 1100 series. Thanks so much.

iT SHOULD be itemized in 1100, just as it states.

Another quick scenario - something you typically see for 2nd Mortgage loans:

Lender has a flat "Processing Fee" usually a couple hundred dollars give or take, and this fee covers documentation, flood hazard verification, tax service, credit report, property valuation, recording and an abbreviated title report.

So on the GFE, that Processing Fee would be shown on Block A, Line 1. POC is no longer shown on the GFE so everything else will be blank.

Then on the HUD-1, all of those above fees would be scattered across the HUD-1 in their respective sections but the amount would be to the left of the column with an indication of POC.

Homeowner's Insurance would still be shown on the GFE in Section B, Line 11 and then on the HUD-1 as POC.

Do I have that right?

BTW - why didn't HUD just created a darn column for POC items instead of making us squeeze or scrawl in the margins? (Rhetorical question...)

I thought if we had a flat processing fee that covered several other charges, we entered the processing fee in Block 1 (line 801) and a credit in Block 2 (line 802) for all the fees the processing fee covered. Then we entered flood, credit report, etc. (everything the processing fee covered) as though the borrower was paying them.) Everything nets and comes out correctly at the bottom of the page.

Bville - I agree with you. It is kinda like a "No Cost" loan.
The fees are disclosed as usual in items 4-8 & then a Negative for the fees the lender is "eating" goes in item 2, with "box B" in item 2 filled in.

...just a quick note about the Settlement Cost Booklet....we've always used the .pdf version. It's loaded in our software where our application forms are stored, so that when a lender prints the ap, out comes the settlement costs booklet with the ap. We don't have to depend upon the lender to remember to give the booklet. Well NOW, the booklet is 60 pages!!! We may have to go back to ordering booklets!!

I've heard it described both ways. The fee that is really sticking with me is the darn credit report fee - especially on a 2nd TD where typically the regular ol' Experian is run. Typically Experian (or Trans Union or Equifax - take your pick) has tiered pricing based on volume for the institution which pulls credit reports for consumer loans, credit cards, commercial guarantors, etc. Joint reports can have one tier price, individual reports another. you won't know the exact fee for at least 45 days later when the bill comes.

I looked at the requirement for "Average cost" and that's a royal pain too. No wonder a number of smaller banks are just saying "NO" to closed-end consumer real estate loans.

I am worried about the insurance risk when we send frail people out of the bank with the settlement book and everything else...it's going to be a heavy load!

Wait until you have to translate all of it onto braille.

I must be missing something. Where does it say the Block 1 can not change (period)?

Page 3 of the GFE states that the fees can not increase once the rate is locked.

Page 13 of the FAQ explains the changed circumstances. Item (2) Information particular to the borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after the GFE has been provided, which information may include information about the credit quality of the borrower, the amount of the loan, the estimated value of the property, or any other information that was used in providing the GFE.

Page 22 - question of the FAQ states that the fees can not increase unless there is a changed circumstance.

We are going to quote all applicable delivery fees in Block 1 with the first box in block 2 checked based on the information have at the time of the GFE. It is easier to tell a customer that the GFE provided is a worse case scenario. It clearly states in (2) if information changes or is found to be inaccurate than we have a changed circumstance. We do not lock a rate until we have all the items necessary to approve the loan. We do not approve a loan until we have the appraisal. The delivery fees, which are part of our origination charges, are dependant upon the credit score and LTV. We know the credit score at the time of the GFE because we can obtain a credit report prior to giving the GFE. If the appraisal comes back lower, than that changes the LTV, therefore we have a changed circumstance. If the appraisal comes back the same, the fees we quoted will be correct. If the appraisal comes back higher, the LTV will be lower and the fees will either be the same as quoted or decrease.

Because the instructions won't allow it. A third party underwriting fee is treated no different then a bank charge.

"Block 1, ‘‘Our origination charge.’’— The loan originator must state here all charges that all loan originators involved in this transaction will receive,.."

We are considering charging a flat fee of say $750 for Line 1 "Our Origination Charge" which will cover all of the typical administarive and origination expenses associated with a loan. These include all services which HUD has identifed as block 1 items shown below. We will not itemize these fees on the GFE nor HUD-1 and some loans may or may not have all fees.
• internal processing fees
• internal underwriting fees
• DU/Investor underwriting fees
• Doc Prep fees (internal and external)
• Admin fees & wire transfer fees
• Courier fees
• 4506T fees
• Employment verification fees
• Condo questionnaire fees (HOA)
• Condo insurance verification fees
• HO Insurance verification fees
• Anti-fraud check fees
• 3rd party subordination fees

None of our fees listed are scheduled to appear in any other section of the GFE, thus we do not anticipate any lender credit on the GFE or HUD-1, nor do we anticipate reconciling the actual cost of these fees to our origination fee of line 1. If one loan does not have a subordination fee nor a condo insurance fee, we will not adjust our origination as we can document our actual origination fees to be at least the amount shown.

This seems in line with the intent of RESPA to move away from itemization and more to a simplified fee structure (though the end result is not cheaper from the borrower).

How are others handling?
Regard and Happy Holidays!

Just wanted to let everyone know I was able to order the 2010 settlement cost booklets this morning with HUD. Call this number 1-800-767-7468

OK - I called them yesterday and they said they hadn't received them.

Thanks for posting this. I'll try again later today.


Just called and ordered. Again - thanks.

I'm really on the fence with these unknown fees that some of you are saying should go in block 2 (charges). We know the origination fee charged will have to be broken out for IRS purposes (a portion of block 1) on the HUD. If you lump other charges into block 3, you would additionally have to do the same for any discount points paid.

Maybe I'm misunderstanding what an "LLPA" actually is. It does sound like the escrow waiver could be something affected by the interest rate, so is it disclosable to the IRS as points? Perhaps this is where I'm confused since I'm not too familiar with those fees.

This may be a dumb question asked six times already, but block 11 on the GFE, homeowners insurance, do we have to carry the cost over and include it into the charges, even though we always require the borrower to pay the premium prior to closing, and never out of the closing proceeds?

My gut says yes, but...

And Jay..the same is true often of the credit report and appraisal fee that is required to be paid up front...you have to disclose it and carry it over and show it on the comparison...are we going to have 1/2 a dozen credits for those things POC? ARGH.

We have our attorney do title exam, prepare HUD, and prepare mortgage for us. Would the fee for them to prepare the mortgage go in Block 1 or Block 4? HUD's Q & A if you look under Block 1 question (6)and HUD-1 - 1100 series question (3) they totally contradict each other.

and Spanish, French, German, Russian, Portguese, Flemish, Norwegian...

Grrrr... I called yesterday and they told me to call back in about 3 weeks.

I just called and sure enough they took my order but said this set would be in black and white.

Thanks Randy. I know the Mortgage Manager's going to ask, so what is the difference between paying a third party to underwrite a loan and paying a third party to perform a flood determination or appraisal? RESPA defines underwriting as as settlement service so why does the underwriting 3rd party fee have to go in Block 1 but all other third party settlement services go in Block 3?

Edited: to add Randy's reply

If the cost of title insurance for the lender or the owner is tied to the loan amount, and the loan amount changes- is that a changed circumstance that allows you to issue a new GFE to restate Box 4 (Title Services) and Box 5 (Owner's TItle) ?

Does the new Hud Settlement Cost booklet get handed out with all GFE's or only purchase money as in the past?