If the borrower is getting a “no cost” loan or rebated charges, must the lender list charges the lender is going to pay?
Yes. The lender is required to show all the costs, even costs the consumer won’t actually pay out of pocket. The charges to be shown on the good faith estimate and the HUD-1 must include any payments by the lender to affiliated or independent settlement providers. These payments should be shown as POC (paid outside of closing). Q: Is it necessary for the broker to disclose any rebate on the good faith estimate when it will be disclosed on the HUD settlement statement? At the time the good faith is typically done, the rate is not locked. If the market turns, the rebate could go away before closing and hurt the broker in the long run. A: Yes. It still is necessary to disclose any rebate on the good faith estimate. The concern about the customer is a valid one. A good way to make sure the customer isn’t surprised at closing is to estimate your yield spread or other lender payment as a range, such as 0 percent to 3 percent. This allows you to comply with the rules, while letting the custom
- Can a lender collect from the borrower an appraisal fee of $200, listing the fee as such on the HUD-1, yet pay an independent appraiser $175 and collect the $25 difference?
- If the borrower is getting a "no cost" loan or rebated charges, must the lender list charges the lender is going to pay?
- If the borrower is getting a "no cost" loan, must the lender list charges the lender is going to pay?