Lending Protection Insurance Disclosure & RESPA

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Question:

Our bank is introducing a new Home Equity Line of Credit loan service. We are considering mortgage lending protection insurance for each line, and wish to pass the premium on to the borrower/s. This would benefit the borrower/s as title policies or certificates would not be required. How should this cost be disclosed under Reg. Z and RESPA?

Answer:

If these are HELOCs, RESPA won't apply. PMI premiums are always finance charges and must appear on the periodic statement and be included in the APR.

First published on BankersOnline.com 10/7/02