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Recently while I was on leave our bank decided to start providing $200 to those who applied, were approved, and executed a fixed-rate conventional mortgage loan. At first they started listing it as a lender credit, but then it messed up the cash to close calculation giving the client $200 more than they were supposed to receive. The gift is provided in the form of a cashier’s check and can be used however the client sees fit. How do you feel about this? How should it be disclosed? Is there anything else to consider?
It seems the safest approach is to disclose it as a lender credit which may mean you might want to rethink how the funds are provided. I’ve heard that the CFPB has said that if it isn’t part of the transaction/legal obligation (customer knew nothing about gift prior to consummation – it was not advertised or even discussed) it might not need to be disclosed this way, but this is third hand info and we haven’t heard anything like directly from any regulotor. We recommend you contact your bank’s regulator or the CFPB to get their thoughts.
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