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#1294761 - 11/27/09 07:32 PM
Re: RESPA changes 1-1-10
FABCompliance
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Diamond Poster
Joined: Sep 2008
Posts: 2,481
Midwest
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We use ARTA Lending and they also added signature lines.
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#1295018 - 11/27/09 09:47 PM
Re: RESPA changes 1-1-10
David Dickinson
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Gold Star
Joined: Mar 2005
Posts: 432
Wisconsin
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I work for a bank that closes mortgage loans in our own name using our own funds with the purpose of then selling those loans to other financial institutions (or Freddie/Fannie). Is that considered table-funding? And if so, are we then considered a mortgage broker under this definition? "table funding" (see the definition in §3500.2) is when the funds aren't yours. If you use your own funds, you are not table funding and you're not a broker. So if we use our own money to close the loans, even though we know we are going to sell to a specific institution that underwrote the loan, we are not table funding and would not be considered a mortgage broker? Is that correct?
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#1295042 - 11/27/09 10:26 PM
Re: RESPA changes 1-1-10
David Dickinson
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Diamond Poster
Joined: Jun 2006
Posts: 1,194
South
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Those fees you listed are settlement charges. I can't see optional credit life as a settlement charge. It's an optional product. The money borrowed is to purchase this product. Thus it's disclosed as part of the initial loan amount on the GFE. Optional credit insurance IS a settlement service. You can find this in the definition - §3500.2 "Settlement Service" #12. As far as listing it in the 900's, if you do that, you're required to list it on the comparison chart per the instructions in Appendix A. Not true. Appendix A says to list "each charge included in Blocks 3 and 7. Then it goes on to say "for each charge included in Blocks 4, 5 and 6 . . . I see no where instructing us to include things that weren't on the GFE to be included in the comparison charge. Sorry to beat a dead horse... So I am assuming that I disclose the full CL premium on line 904. Where/how do I offset this from being in the total settlement charges (Line 1400) since the premium will be financed?
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#1295147 - 11/28/09 01:08 AM
Re: RESPA changes 1-1-10
RUKiddingMe
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10K Club
Joined: Aug 2004
Posts: 10,321
oHiO
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New Question about tolerance cures:
I'm very confused about tolerance cures...in the example on page 33 of the most recently issued HUD FAQ, the HUD indicates on page 2 that the customer paid $800 of a $1000 transfer tax bill (apparently the GFE showed the estimate of $800, and there is zero tolerance). There is also a $200 entry as POC Lender.
Why wouldn't the HUD show $1000 for transfer taxes in the borrower column, with a $200 credit on page 1?
What would be an example of a situation in which the cure is on page 1 of the HUD rather than shown as a 'POC Lender' on the GFE? The zero tolerance section the lender would have to "eat" that's why it shows POC lender for that section. With the 10% tolerance category the credit would show in the 200 section page 1 of the HUD as borrower credit.
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#1295148 - 11/28/09 01:36 AM
Re: RESPA changes 1-1-10
stella
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10K Club
Joined: Aug 2004
Posts: 10,321
oHiO
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These items may have been covered so I am sorry if I am repeating anything but,
1. is there any kind of waiting period (similar to TIL requirements) before closing once we re-issue a revised GFE? ie. does the borrower have to wait 3 days before they can close once we have re-issued a GFE? 2. do we disclose insurance on a refinance on the GFE? 3. do we have to redisclose a GFE on items where there is unlimited tolerance?
4. For purchases the seller picks the title co. We have no idea who it is going to be. Are we still in the 10% tolerance zone-it is not someone we identify so is this unlimited? Do we have to give them a list to shop from even though they aren't really shopping because it is the sellers choice, not the borrowers? 5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy?
Thanks! 1. No 2. Hazard insurance? yes, then shown as POC on HUD SS 3. No 4.We have that situation in foreclosed property that the borrower is buying- and the seller chooses the title co- David's Q&A from webinar states: It depends. If the bank requires a title company to close the loan, then you are subject to the tolerance limitations. If the bank does not require the use of a title company, then you do not need to be concerned with the tolerance issues. 5.Sounds like you are selecting the service provider so it would be subject to a 10% tolerance increase.
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#1295151 - 11/28/09 02:19 AM
Re: RESPA changes 1-1-10
stella
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10K Club
Joined: Nov 2000
Posts: 18,765
Central City, NE
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1. is there any kind of waiting period (similar to TIL requirements) before closing once we re-issue a revised GFE? ie. does the borrower have to wait 3 days before they can close once we have re-issued a GFE? 2. do we disclose insurance on a refinance on the GFE? 3. do we have to redisclose a GFE on items where there is unlimited tolerance? 4. For purchases the seller picks the title co. We have no idea who it is going to be. Are we still in the 10% tolerance zone-it is not someone we identify so is this unlimited? Do we have to give them a list to shop from even though they aren't really shopping because it is the sellers choice, not the borrowers? 5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy? 1. There is no waiting period once the GFE is delivered. 2. Yes. It is a lender's requirement. 3. If there is a changed circumstance, you can, but it doesn't make much sense to me since it is unlimited tolerance. 4. If the seller PAYS the fee, it isn't listed on the GFE. If the borrower pays the fees, you must pick the provider or provide a list of recommended providers. 5. If you don't require it, it doesn't show up on on the GFE. Since it isn't on the GFE, there is no tolerance if the borrower still chooses to purchase it.
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#1295273 - 11/30/09 01:57 PM
Re: RESPA changes 1-1-10
Clint,,,,,
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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Thanks for that, Clint...and "my sentiments exactly", btw!
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1295279 - 11/30/09 02:09 PM
Re: RESPA changes 1-1-10
David Dickinson
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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4. For purchases the seller picks the title co. We have no idea who it is going to be. Are we still in the 10% tolerance zone-it is not someone we identify so is this unlimited? Do we have to give them a list to shop from even though they aren't really shopping because it is the sellers choice, not the borrowers? 5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy? 4. If the seller PAYS the fee, it isn't listed on the GFE. If the borrower pays the fees, you must pick the provider or provide a list of recommended providers. 5. If you don't require it, it doesn't show up on on the GFE. Since it isn't on the GFE, there is no tolerance if the borrower still chooses to purchase it. David, how are you justifying these two answers, particularly when it comes to block 5? The Q&A on this block of the GFE seems very clear that no matter what, and no matter who pays for it, you have to disclose it on purchases.
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My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1295331 - 11/30/09 03:25 PM
Re: RESPA changes 1-1-10
Bullseye
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Gold Star
Joined: Apr 2003
Posts: 382
Way Out West
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Wolters Kluwer has added signature lines to their forms but we just received a bulletin stating they are removing and replacing those forms.
Another question - In regards to the FAQ's under GFE Block 2 #4:
Q: The regulation states that while the borrower’s interest rate is locked, the credit or charge for the interest rate chosen and the adjusted origination charge may not increase from the amount shown on the GFE. On a “no-cost” loan that covers third-party costs where the rate has been locked, the GFE should show a credit for the interest rate chosen, in an amount sufficient to cover the estimated loan originator and third party fees. If the actual third party fees at closing are lower than stated on the GFE, may the loan originator reduce the amount of the credit to match what is needed to pay the actual third party and loan originator fees?
A: No, the amount of the credit may not be reduced. The loan originator may choose to: 1) have the amount of the credit remain the same as stated on the GFE to cover additional closing costs previously not anticipated to be included in the “no-cost” loan; 2) apply a principal reduction to the principal balance; 3) reduce the interest rate and the credit accordingly; or 4) have the credit remain the same, resulting in cash to the borrower.
We do not lock rates so I am wondering if the same answer would apply for loans with rates that are NOT locked. Any guidance would be appreciated! Thanks! I would also appreciate a response to this question, PLEASE.
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"Are you going to pull those pistols or whistle Dixie?"
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#1295357 - 11/30/09 03:51 PM
RESPA
Clint,,,,,
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Platinum Poster
Joined: Sep 2007
Posts: 937
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Maybe we will get an 11th hour reprieve as with UIGEA. The Q&A's are not enough to get thru the final rules and understand how to properly address the "GFE", which IMHO is no longer an estimate at all. Mortgage lending is too diverse to simply cover with a one size fits all Q&A that can cover the entire range of circumstances that might be involved with a mortgage loan. We desparately need help here going forward. Wonder if HUD is listening? HELP!!
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#1295367 - 11/30/09 03:54 PM
Re: RESPA
ccman
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Power Poster
Joined: Feb 2005
Posts: 6,559
Foxboro
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Maybe we will get an 11th hour reprieve as with UIGEA. The Q&A's are not enough to get thru the final rules and understand how to properly address the "GFE", which IMHO is no longer an estimate at all. Mortgage lending is too diverse to simply cover with a one size fits all Q&A that can cover the entire range of circumstances that might be involved with a mortgage loan. We desparately need help here going forward. Wonder if HUD is listening? HELP!! I highly doubt it ccman. Last week I got a copy of a letter from October sent to the powers at be put together by the ABA, MBA, and about 4 other industry groups. It was about 40 pages long and detailed specific issues with the new rules, contradictions, and general information about how the changes would most likely hurt and not help consumers. There was a brief 2 page response from HUD essentially saying too bad, all ahead full.
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#1295372 - 11/30/09 03:59 PM
Re: RESPA changes 1-1-10
FABCompliance
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Junior Member
Joined: Nov 2009
Posts: 28
Illinois
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Just an update...I contacted Calyx regarding their signature lines on the 2010 GFE, they said prior to 11/19/09 the signature lines were approved by HUD, but that has since changed. They are working on a service pack update that will remove the signature lines from the GFE, but do not have an eta on this release.
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#1295438 - 11/30/09 05:14 PM
Re: RESPA changes 1-1-10
Clint,,,,,
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Platinum Poster
Joined: Jan 2004
Posts: 968
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Wolters Kluwer has added signature lines to their forms but we just received a bulletin stating they are removing and replacing those forms.
Another question - In regards to the FAQ's under GFE Block 2 #4:
Q: The regulation states that while the borrower’s interest rate is locked, the credit or charge for the interest rate chosen and the adjusted origination charge may not increase from the amount shown on the GFE. On a “no-cost” loan that covers third-party costs where the rate has been locked, the GFE should show a credit for the interest rate chosen, in an amount sufficient to cover the estimated loan originator and third party fees. If the actual third party fees at closing are lower than stated on the GFE, may the loan originator reduce the amount of the credit to match what is needed to pay the actual third party and loan originator fees?
A: No, the amount of the credit may not be reduced. The loan originator may choose to: 1) have the amount of the credit remain the same as stated on the GFE to cover additional closing costs previously not anticipated to be included in the “no-cost” loan; 2) apply a principal reduction to the principal balance; 3) reduce the interest rate and the credit accordingly; or 4) have the credit remain the same, resulting in cash to the borrower.
We do not lock rates so I am wondering if the same answer would apply for loans with rates that are NOT locked. Any guidance would be appreciated! Thanks! I would also appreciate a response to this question, PLEASE. I emailed the question to HUD. "Judy" stated that you may not reduce the amount of the credit listed on the GFE even if you do not lock your rates. This FAQ would apply and you would have to follow one of the four options listed.
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#1295555 - 11/30/09 06:50 PM
Re: RESPA changes 1-1-10
Bullseye
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Gold Star
Joined: Apr 2003
Posts: 382
Way Out West
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Wolters Kluwer has added signature lines to their forms but we just received a bulletin stating they are removing and replacing those forms.
Another question - In regards to the FAQ's under GFE Block 2 #4:
Q: The regulation states that while the borrower’s interest rate is locked, the credit or charge for the interest rate chosen and the adjusted origination charge may not increase from the amount shown on the GFE. On a “no-cost” loan that covers third-party costs where the rate has been locked, the GFE should show a credit for the interest rate chosen, in an amount sufficient to cover the estimated loan originator and third party fees. If the actual third party fees at closing are lower than stated on the GFE, may the loan originator reduce the amount of the credit to match what is needed to pay the actual third party and loan originator fees?
A: No, the amount of the credit may not be reduced. The loan originator may choose to: 1) have the amount of the credit remain the same as stated on the GFE to cover additional closing costs previously not anticipated to be included in the “no-cost” loan; 2) apply a principal reduction to the principal balance; 3) reduce the interest rate and the credit accordingly; or 4) have the credit remain the same, resulting in cash to the borrower.
We do not lock rates so I am wondering if the same answer would apply for loans with rates that are NOT locked. Any guidance would be appreciated! Thanks! I would also appreciate a response to this question, PLEASE. I emailed the question to HUD. "Judy" stated that you may not reduce the amount of the credit listed on the GFE even if you do not lock your rates. This FAQ would apply and you would have to follow one of the four options listed. Thanks, BullsEye. I kinda figured that, but one needs to be certain, before one holds a training seminar.
_________________________
"Are you going to pull those pistols or whistle Dixie?"
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#1295608 - 11/30/09 07:45 PM
Re: RESPA changes 1-1-10
Bullseye
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Diamond Poster
Joined: Mar 2002
Posts: 2,282
Far from Calif
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I did a search and didn't really see this specific issue addressed - please direct me to the thread number if perhaps I just didn't set my search right.
I saw the FAQ (#2, pg. 34 on the 11/19/09 FAQ) that states if we use the HUD-1 in a transaction not subject to RESPA that it will NOT result in the loan being subject to RESPA.
So, if we use the new HUD-1 on a non-RESPA loan, how do you explain all the references to the GFE that the customer never received (i.e. land loans)?
Or...what about those instances where a HUD-1 is used for a commercial transaction - we currently use a "commercial HUD-1" form - can we still do that, or will we have to use this HUD-1 that references the GFE, loan terms, etc.?
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The opinions expressed are mine and do not necessarily reflect those of my employer _._._._._._. A.S.A.P. Always Say A Prayer <><
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#1295657 - 11/30/09 08:07 PM
Re: RESPA changes 1-1-10
CalifDreamin
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10K Club
Joined: Nov 2002
Posts: 20,656
The Swamp
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I would think that if you wanted to use a simple HUD 1-type form for non-RESPA loans, there would be nothing inherently wrong with using the soon-to-be "old" version.
_________________________
My opinion only. Not legal advice. Say you'll haunt me - Stone Sour
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#1295670 - 11/30/09 08:11 PM
Re: RESPA changes 1-1-10
RR Joker
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Power Poster
Joined: Jul 2002
Posts: 5,568
New Jersey
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I would think that if you wanted to use a simple HUD 1-type form for non-RESPA loans, there would be nothing inherently wrong with using the soon-to-be "old" version. FWIW, I agree. That is most likely what we will do.
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Management is doing things right; leadership is doing the right things. Peter Drucker
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#1295705 - 11/30/09 08:29 PM
Re: RESPA changes 1-1-10
RR Joker
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10K Club
Joined: Nov 2000
Posts: 18,765
Central City, NE
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4. For purchases the seller picks the title co. We have no idea who it is going to be. Are we still in the 10% tolerance zone-it is not someone we identify so is this unlimited? Do we have to give them a list to shop from even though they aren't really shopping because it is the sellers choice, not the borrowers? 5. We do not require owners title policy, say at closing the borrowers atty reccomends the borrower get an owners title policy, since we picked the title co is that something we would then be required to be within 10% even though we do not require the policy? 4. If the seller PAYS the fee, it isn't listed on the GFE. If the borrower pays the fees, you must pick the provider or provide a list of recommended providers. 5. If you don't require it, it doesn't show up on on the GFE. Since it isn't on the GFE, there is no tolerance if the borrower still chooses to purchase it. David, how are you justifying these two answers, particularly when it comes to block 5? The Q&A on this block of the GFE seems very clear that no matter what, and no matter who pays for it, you have to disclose it on purchases. I didn't read this question to be only about Owner's Title Insurance. The question pertained to title companies - they do lots of work besides title insurance. I agree if the bank requires owner's title insurance, it must be listed no matter who pays for it. But if owner's title insurance is not required, it does not need to be listed. Also, if we're talking about other things (closing agent, etc.) performed by the title company and the borrower is not paying for these things, they are not listed on the GFE.
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#1295838 - 11/30/09 09:55 PM
Re: RESPA changes 1-1-10
bstritecky
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Gold Star
Joined: Feb 2005
Posts: 313
sd
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Can someone direct me to finding an answer to the following: On construction/perms we may do several inspections throughout the construction phase. Sometimes the inspections are done by bank staff and sometime by an appraisers. We typically charged a fee per inspection - can we just increase our origination fee and eliminate the inspections fee? Does anyone have any feedback on this one. I would truly appreciate it.
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#1295843 - 11/30/09 10:00 PM
Re: RESPA changes 1-1-10
bstritecky
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Power Poster
Joined: Feb 2005
Posts: 6,559
Foxboro
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Can someone direct me to finding an answer to the following: On construction/perms we may do several inspections throughout the construction phase. Sometimes the inspections are done by bank staff and sometime by an appraisers. We typically charged a fee per inspection - can we just increase our origination fee and eliminate the inspections fee? Does anyone have any feedback on this one. I would truly appreciate it. One source told me that if the fees are going to the lender, they would be included in Box 1-if going to an outside firm, they would go in box 3, as the appraisal fee is. I have not researched that any further though.
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Best QB Ever. Worst Defense Ever.
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#1295917 - 11/30/09 11:11 PM
Re: RESPA changes 1-1-10
RR Joker
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Gold Star
Joined: Mar 2008
Posts: 294
The Texas Hill Country
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I'm getting hung up on "origination charges" on a "no or partial paid cost loan". If I normally charge an origination fee, application fee, etc. but don't charge those on my "no fee" program - must I disclose what the orig "might have been" in block 1 and offset it block 2? I think not. I think the only fees I would show here would be my attorney doc prep fees, etc. - 3rd party fees that I'm paying on behalf of the customer to originate the loan - not my own internal origination costs that I'm "waiving". The question sounds stupid even as I type it but I'm starting to question EVERYTHING!
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