How to Disclose Borrow Paid Closing Cost HELOC

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Question:

When, where and how do I disclose borrower paid closing cost for a HELOC?

Answer:

You'll find this information in Reg Z in section 1026.40. Specifically 1026.40(d)(7) & (8) govern disclosure of fees in conection with opening, using, and maintaining the plan. Section 8 covers third party fees, including closing costs. In the program disclosure document to be provided at application, you'll give a good faith estimate of an aggregate amount of fees payable to third parties in connection with opening the line and the consumer is entitled to an itemization of those fees if they want. Alternatively, you can provide the itemization in the disclosure. Appendix G-15, section (g), gives model language for this section of the disclosure.

It is permissible, but not required, to provide a HUD-1a in connection with a HELOC to detail the settlement costs the borrower actually pays.