The Regulatory Screwed Over Bank regularly uses the following Service Providers to provide their specific services for real estate related loans. The Regulatory Screwed Over Bank does not specifically endorse these providers and the list is being provided to you in accordance with RESPA 3500.7 and the instructions in Appendix C of HUD’s Regulation X RESPA.

You are under no obligation to choose the providers shown and are free to choose your own provider as long as they are properly licensed and they regularly perform the required service.

This list is controlled and maintained by the manager of The Regulatory Screwed Over Bank's mortgage loan department. This list is current as of January 2, 2010.

DAN NOW CUT THAT OUT!!!!!!!! I start cackling like a hen and then trying to cya saying 'but it's my banking website and I'm reading about RESPA changes...honestly I am!' Regulatory Screwed Over Bank

Ain't that just the TRUTH! Thanks for the laugh, Dan! :-)

I nominate Dan's post as "Post of the Day."

We are into full blown testing of our system. I'm looking at a purchase GFE. In box 6 we are listing Life & disability rollover, subordination fee (charge from other institution) and condo certification. I'm struggling with the subordination fee and the L & D rollover. They don't seem to fit box 6. Can I get an opinion on these 2 charges and where they should be disclosed? Thanks!

First, thanks everyone. Glad I was able to bring a smile to your faces in spite of all these changes we are faced with.

Yaz:

I'm not sure what a life and disability rollover is. So no comment on that fee.

If the subordination fee is the fee being charged by the financial institution agreeing to the subordination then I would think that would most likely go in in Block 1 as part of the origination charges. If it is the filing fee for the subordination agreement then I would put in Block 7.

Thanks Dan. If a Borrower has a life and disablility policy on another mortgage and they wish to continue that insurance on a refinance with us, (sorry, I said purchase earlier)we would charge the first month upfront. This fee is paid to a third party. Not sure were this would go.

Generally, voluntary life and disability charges are not considered settlement charges. I would think this would be shown in Block 9 as part of your escrow deposit.

Any thoughts here or how you are handling prequals>>>>>>>>>>

If the original GFE was issued with Box 1 of Block 2 marked, and the rate is later relocked, on a revised GFE, couldn't we again choose to mark Box 1 of Block 2, resulting in a changed Block 1 (assuming that there was increase or decrease in origination points due to the relock)?

Do ALL applicants have to receive the GFE, AND all applicants provide notice of intent to proceed before we can collect fees beyond the credit report?

My group is still insisting on deoing preapprovals with the hope no one finds a house they like within 10 business days of the GFE



This point is a real bugger to me since so many of these lately are not discovered wuntil title comes in... I am afraid of how many of these subordination fees charged by the bank, we will have to eat, since we cannot change Block 1.

I didn't listen to any of the HUD presentations. From what I'm hearing I'm glad I didn't.

From page 22 of the 11/19/09 FAQs:

3) Q: Can the charge shown on the GFE, Block 1, ―Our origination charge‖, increase after the GFE has been issued?
A: No. Block 1, ―Our origination charge‖ cannot increase unless there is a ―changed circumstance‖ as defined in 24 CFR § 3500.2.

To me this plainly states that Block 1 can change in relation to a qualified changed circumstance, however keep in mind that only the charges shown in Block 1 that are affected by the changed circumstance can change.

What I'm most concerned about is page 23 Q&A #4. If we have stated a credit in bullet #2 in block 2 does that asinine answer apply unless the rate and credit are reduced together? We don't have "no cost" loans but I'm concerned they will try to apply that answer to any credit shown in Block 2.

As a lender, we are considering just using the first bullet point in Block 2 for all our loans (even the ones that pay points to buy down the rate) with the exception of our FHA and VA loans because we are a correspondent and fall under the broker definition for those loans.

It seems to me that a subordination fee paid to the originating lender would be an origination charge and something you would know about when you took the app, but a subordination fee paid to a third party lender would be a title-related charge and belong in Block 4. Additionally, I would think that the discovery of a secondary lien on the title commitment that wasn't revealed by the borrower on the original applcation would be a "changed circumstance".

I'm not sure how a subordination agreement would come into play on a purchase transaction unless a current residence was also being used. And if you give pre-approvals on refinancings then you would have an identified property that you based the GFE on.

If it was found you would need a subordination for the current residence after receiving the title work I would think that would be a qualified changed circumstance allowing you to redisclose. Although I think I read somewhere today that one of the posters got a contradictory opinion from HUD.

I now hold my regard for HUD well below my regard for HMDA Help.

The subordination agreement is required by the originating lender in order to be placed in the desired lien position. Why would it be a title charge vs an origination charge? The lender can proceed with the loan without the subordination agreement, they just won't be in the desired lien position.

Dan, I agree this would almost never come up on a purchase. Usually it happens where Lender A refinances a property currently financed by Lender B and there is either a favorable HELOC or forgiveable equity loan outstanding that the borrower wants to hang on to. Many times, subordinations aren't allowed due to underwriting considerations.

Or lenders have attached a mortgage to an auto loan... I am not so worried about the recording fees as I am about the 200-250 charge the lender is charging us to review it.

Per HUD's 'plain english' garbage: Block 1 fees CANNOT change, even with a changed circumstance. The exception being: if the loan amount changes and a portion of the origination charge is a percentage of the loan amount or the overall loan program changes.

This leads me to believe that when the title comes back on that refi and we need to the other bank to review and subordinate, where can I put that fee?

Dan, just saw your question. I guess I would consider the subordination fee a title charge because title work is all about establishing the desired lien position. If we are considering a first mortgage loan, which is most of our business, we would not proceed if there were an intervening lien unless it were subordinated or paid off. Same would be true of an equity loan where we expected to be in second position and there was an existing lien that would put us in third without a subordination.

Dan this is too funny!!!

On a serious note, the written provider list under new Reg. X is for companies/persons that provide settlement services that we will allow the customers to shop for. The "required use" disclosure goes away with new rule. You are not required to give a list for settlement services that the creditor requires but does not permit the consumer to shop for. I'm wondering about your saying "regularly uses the following Service Providers." I'm also wondering whether you need to say anything about the list being controlled and maintained by the manager of the mortgage dept.

I made some changes to the sample wording you posted. Any comments or suggestions?

"The ABC Bank allows you to shop for certain settlement services. The attached list contains the names of service providers that you may choose to use. The ABC Bank does not specifically endorse these providers and the list is being provided to you in accordance with section 3500.7 of HUD’s Regulation X (RESPA) and the instructions in Appendix C of the regulation.

You are under no obligation to choose the providers shown and are free to choose your own provider. This list is current as of January 2, 2010."

I agree with Dan, this would be an orgination charge as it is a specific requirement of the lender to ensure the lenders position. It does not fall within the defiition of a title service.

Why don't you just put what they qualify (the amount) on a piece of paper. Don't do a GFE until they have a property address.

Thanks Dan for the laugh. This is all crazy.

Does anyone know what block real estate taxes that are due go on the new GFE?

I'm stuck on the issue of how to list paying the borrowers third party fees. If I want to pay for their Credit Bureau, I know I have to list the fee in box 3 as a charge. However, box 2 doesn't seem to be an appropriate place to credit this. Box 2 deals with points and YSP. Box 2 doesn't have a place for fees. Shouldn't the credit for a 3rd party fee be documented on the HUD and not the GFE?

Do I include the first lienholder's fees (purchase money) on my good faith estimate when preparing my good faith for a second lien purchase money (borrower's equity contribution)? Both loans will be reflected on one HUD-1. An appraisal is not required on our second lien, however, one is needed on the first lien, of which we will get a copy to back-up our in-house evaluation. The appraisal fee is on the HUD-1. Should I reflect this as "POC", since it is not required on our loan? I have the same issue with the survey. We are not requiring, but one was obtained for the first lien and we are getting a copy.