::fingers crossed::

LOS hotpatch going on the test server this morning...

nix that... no hotpatch avaialable... LOS website mentioning Dec 24th, tentatively


::revising LO/processor training to complete forms by hand::

gotta love that. We'll be down to the 11th hour and no testing the way it's going.

One of our tellers is a notary public. We utilize her services for loan closings that do not require an attorney. Am I correct that these notary fees should be listed in Block 4 - Title Services and Lender's Title Insurance? We charge the borrowers a notary fee and the employee that does the notary work is paid 100% of the fee collected. This is over and above her normal salary.

Do we need to do anything as far as listing her on an Affiliated Business Arrangement disclosure?

Are there any Section 8 issues here?

So taxes will only show on the HUD, correct? The only way the borrower will know that money will be required at closing is if 1)they're extremely saavy; 2)someone tells them at time of application or 3)we do a seperate 'real GFE' for them as David and RR have mentioned previously in this thread. Have I got this right?

yep...I think you got it! Merry Christmas and a very scary New Year this year, right?

Thank you David.

Yes Colleen, RE Taxes do not show up on the new GFE.

Any thoughts?

This is what we are doing:

#1. We are putting the next day date and 10:00 AM

2. We are putting the date that will be 10 business days out.

3. We are putting 45 days

4. On loans that are floating it will be 7 days; if the rate was locked we will leave that block blank.


THIS IS FOR OUR FREDDIE MAC LOANS.

It was hard to convince my people that this fee was an origination charge and not a title charge.
Dan mentions a changed circumstance but even if that came about through the title company - if it's part of the origination charge or should have been we couldn't change Block 1 anyhow.

Are you suggesting listing the real estate taxes as poc on the HUD still?

I just submitted these questions to HUD and will let you know i I get a response, but am wondering what other lenders are doing in terms of re-accepting GFEs on a borrower where they previously rejected a GFE. Here are the questions I sent:
* If a lender does not accept a broker GFE, and then, after the GFE expires, receives a second GFE from the broker on the same borrower, may the lender accept the subsequent GFE? In this situation, does HUD have any expectation that the lender will attempt to determine whether the customer expressed an intent to continue on the first GFE within the original 10 business day period? For example:
Jan 4 - Customer application taken by broker
Jan 5 - GFE #1 given to customer by broker
Jan 6 - Lender rejects GFE (for example, because no transfer taxes are estimated)
Jan 21 - Lender receives GFE #2 on same borrower/property (which includes transfer taxes) - can lender accept GFE #2?

* If a broker issues a GFE to a customer who expresses an intent to move forward with the application before the GFE expires, but the broker is unable to find a lender who will accept the GFE, what does the broker need to do to comply with RESPA if it wants to help the customer obtain a loan? Can a broker deny the loan anticipated by the original GFE, and then issue a second GFE to the customer and submit it to a lender?

Paying the taxes current has always been a requirement of getting the loan. It also shows up as a requirement on the title insurance. I'm thinking that somehow, somewhere, paying the taxes has to be addressed. If it isn't on the HUD as either paid at closing or POC, how do we fill the requirement for the title insurance to be issued?

I meant to update my earlier post with a response that we did get back from HUD. RR Joker's comment about the referral language turned out to be correct. This is what HUD staff said:
RESPA Section 3500.7(i) states that “If any charges at settlement exceed the charges listed on the GFE by more than the permitted tolerances, the loan originator may cure the tolerance violation by reimbursing to the borrower the amount by which the tolerance was exceeded…” RESPA does not govern lender-broker agreements as long as the agreement does not violate Section 8.
While this Office may revisit this issue in the future, at this time, we do not anticipate that lenders that require brokers to reimburse lenders for tolerance violations will be in violation of Section 8 solely due to requiring reimbursement.

It does go on the HUD, just not the GFE. It's something that needs to be paid, but it's not a "cost/fee" associated with getting the loan. That's how I'm looking at it anyway.

I am feeling like a dummy, but what are "tax services" as used in block 3?

We never listed the Taxes as poc until the FDIC got uppity about back in '05. Nothing that I have seen in the rules or appendixes, or even HUD's examples show it being assessed onto the backside of the HUD.

If the taxes came due and have been paid, that will show on the title. If the taxes are not yet due, how will that slow down the titlework?? If taxes are due or outstanding and have yet to be paid, then they would be rolled into the loan and paid out of proceeds, and therefore listed on the front.

I don't think I am understanding your concerns...

I wasn't concerned until whoever brought up the question back a few posts. Now I'm wondering. Let's just stick with taxes that have to be paid at closing. As I understand it, you can't show it on the GFE but you're going to show it on the HUD, right. By saying "rolled into loan and paid out of proceeds" you don't mean finance the money for taxes, do you?

Sorry. Panic is setting in for me. If I could just get my hands on our software to test this I'm sure it would make a lot more sense to me. I always test out as visual.

Only if they are owing for back taxes, and that is what part of the refi is for, if a refi.

Are you trying to hone in on this time of year specifially?

I guess I am alloking at it from an overall standpoint, but I agree, if not required to be listed on the GFE, and not required to close the loan i.e mid year when they are not due, then no, I do not feel you nee dto list the prior years taxes as poc on the hud.

For borrowers with impound accounts the tax service agency's job is to provide the lender with the borrowers property tax bills so that they will be paid on time. For borrowers without impound accounts, the company will often remit any unpaid property taxes on behalf of the homeowner and then bill him or her for the sum, plus penalties and fees.

I have read all the postings on optical credit life where the premium is not paid up front, but added to the monthly P&I pymt.
Here goes....
I will not list the insurance on the GFE but if I know the borrower wants the insurance before I issue the GFE, I will include the monthly premium in the P&I pymt listed in 2 areas: summary of your loan and escor account information.
We only use HUD-1a so I will list one years premium in line 904 even though we do not require it to be paid up front - it is rolled into the loan amount.
And the fee does not get pulled from line 904 on the HUD1a into the comparison chart.

Is this right?

If they are doing the work for the bank, I believe it goes in Block 1, but I understand the confusion from the FAQs you cite. Also, remember you cannot charge for preparing the HUD-1 (or any RESPA or TIL documents).

Are we still waiting for more guidance from HUD on how to show Credit Insurance on the Settlement Statement?

I had it in my mind we would put it in the 900 series, but our software (Laser Pro) will only allow services required by the bank in that series. So I'm thinking we'll have to put in the 1300 series.

I have two questions:

1) If a customer brings their own attorney to the closing to review the closing docs...would the attorney's fee be a "Settlement Service"? The attorney was not required by the bank. The customers did it for their own piece of mind.

2) If flood insurance is required...does this estimate go under Block 11-Homeowner's insurance on the GFE?

Thanks!