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Sheila Gilmer submitted a couple of excellent questions:
1. If we are aware of an item the customer wants or is a result of the contract but we don’t require the service, I understand we list that in the “Other” section. Is this something we should begin asking the customer at application if it’s not mentioned in the contract?
ANSWER: You disclose such items if you are aware of them. Asking the applicant if any such items exist is not required, but it is not a bad idea. At a minimum check the contract, if you have a copy, and ask employees who dealt with the applicant if any mention was made of such items.2. I understand the Lender Paid specific items and non-specific Lender Credits and how to handle those on the Estimate and Closing documents. How would the disclosures handle a situation in which the sales contract provides for the seller to pay a set amount toward closing, for example $3,000?
ANSWER: Seller credits appear in the “Calculating Cash to Close” section of the Loan Estimate and the Closing Disclosure.Question: Pg 79 on the loan estimate for property tax if we have county and city can it be listed out such as property tax – county and property tax – city?
Answer: On page 2 of the loan estimate under the heading “Other Costs” and the subheading “Initial Escrow Payment at Closing” a line is labeled Property Tax. That line is followed by 5 blank lines that can be labeled and used for any other escrowed items. That results in six lines available for itemizing property taxes.
Question: On pg 82 on the loan estimate it says if the creditor is aware of the commission to include it but if we are not should we guess about the commissions by assuming it is 3% since most loans do have commission?
Answer: Section 1026.37(g)(4) requires an itemization of other amounts the “consumer is likely to pay… and which the creditor is aware at the time of issuing the Loan Estimate.” From information in your question it appears “likely” that the customer will have to pay the commission. It seems that the commission will have to be paid unless you have knowledge that an exception will be made in this case. If you do not have a copy of the sales contract that details commission you may want to inquire if there is an agent involved in the transaction to whom a commission will be due.Question: If we are not allowed to obtain a copy of a purchase contract at the time of application, how are we supposed to disclose some of the cash to close figures?
Answer: You can only disclose what you know at the time the Loan Estimate is prepared. In more than one case the instructions mention that a creditor may “know” an amount that will be paid in the transaction from information obtained verbally from the consumer, from a review of the purchase and sale contract, or from information obtained from a real estate agent in the transaction. If you suspect that item will be paid in the transaction ask the customer, the realtor or other party to the transaction. If you are truly not aware of an item and become aware of it later you have a “changed circumstance” and you can provide a new disclosure reflecting the amount.
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