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Where should the deed prep fee be disclosed on the Good Faith Estimate and HUD, in origination charge or Title Services? Also, if seller paid, does it need to be disclosed on the Good Faith Estimate??
RESPA FAQ says:
6) Q: Are attorney‘s fees charged to prepare loan documents for the lender considered part of the charge for origination services disclosed on Block 1 of the GFE?
A: Yes, attorney‘s fees charged to prepare loan documents for the lender are considered part of the charge for origination services disclosed on Block 1 of the GFE and should not be separately itemizedIt also appears deed prep falls into the definition of Title Service.
Please help clarify!!
I believe what the question you referenced is referring to is a fee for an attorney preparing documents (GFE, HUD, note, etc.) for the lender. Deed prep is a title services fee and (if it is typically a borrower paid fee) should be disclosed in block 4 of the GFE and 1101 of the HUD. If it is disclosed on the GFE and then you find out later it will be paid by the seller it should be disclosed in 1101 as a charge to the borrower, then a credit to the borrower and a charge to the seller on page 1 of the HUD.
Take a look a these Q&As from the RESPA FAQ 1100 Series:
3) Q: Are document preparation fees included in ―title services‖ or would they appear as separate line item charge in the borrower‘s column?
A: Document preparation fees are part of administrative or processing fees which are included in the charge in Line 1101 of the HUD-1 and may not be separately itemized.
15) Q: What items are included in the amount disclosed on Line 1101 of the HUD-1?
A: Line 1101 is the total of the charges for ―Title services and lender‘s title insurance,‖ which includes: all charges for conducting a settlement (Line 1102); any premiums paid for lender‘s title insurance and its related endorsements (Line 1104); all charges for title searches and examinations; and charges for all other services itemized in the 1100 series if those services are included in the definition of ―title service.‖ The total on Line 1101 should not include the amount of any premium for owner‘s title insurance and its related endorsements, which must be listed in the columns on Line 1103.
HUD General:
6) Q: How should payments by the seller or real estate agent that are for settlement services included on the GFE be shown on the HUD-1?
A: If a seller or real estate agent pays for a charge that was included on the GFE, the charges should be listed in the borrower’s column, with an offsetting credit reported in Lines 204-209 of the HUD-1, identifying the party paying the charge. For a seller-paid charge, the charge should also be listed in Lines 506-509. For a charge paid by the real estate agent, the name of the person paying the charge must also be listed.
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