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Good Morning – we have a loan in which the borrower paid for their appraisal fee after providing their intent to proceed on a TRID loan.
How do we show this on the CloD?On page 2 in Loan Costs we put this under the Borrower-Paid BEFORE Closing column in our normal appraisal line.
Do we need to put this on page 3 of the CloD in Section L. as a deposit? Again, it is for a specific fee (appraisal). We have tentatively placed it in L.04 showing as “Appraisal Deposit”.
The title company told us to put it in L.06 under “Other Credits” as “Application Deposit”; however, this is incorrect based on my understanding of the reg and is misleading to the customer…it’s NOT an application deposit, it was for the appraisal. Plus, Official Interpretations §1026.38(j)(2)(vi)-1, which is the “Other Credits” section, says that this is for items paid by/on behalf of consumer “not disclosed elsewhere”. Then it says if the credit is attributable to a specific closing cost listed in the Closing Cost Details, it should be reflected in the “paid by others” column.Based on the reg interpretation…it sounds like we need to put it on page 2 TWICE?
I’m so confused. Any help is much appreciated.Thank you – and MERRY CHRISTMAS!
It sounds like you have been disclosing it correctly on page 2 under Closing Cost Details/Borrower Paid Before Closing. The Calculating Cash to Close would then show under Closing Costs Paid Before Closing. See the CFPB’s CD example, linked below, showing the credit report paid by borrower before closing.
https://files.consumerfinance.gov/f/201403_cfpb_closing-disclosure_cover-H25B.pdf
I don’t believe it would be disclosed as a deposit under L. since doesn’t fit the definition of what a deposit is, described in the regulation, and it would not be listed under Other Credits because it was already disclosed in section “f” and “h”. Again, look at the closing disclosure linked above and follow the credit report fee that is paid before closing by borrower and how that is disclosed (the credit report fee is omitted from section K.3 on page 3).
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