During testing I came accross an SMD refinance (no cash out) loan that closed around the time annual property taxes were due. We financed the property taxes due and they were shown in Block 6 on the GFE? My understanding is property taxes are not listed on GFE ever. When I questioned them on this they said it was the only way they could disclose the taxes and it not be considered a cash out loan? Two questions:
1) Am I right in stating property taxes should never be shown on the GFE?
2) Should this loan have been considered a cash-out loan requiring right of rescission?
First – I apologize, I’m not sure what an SMD refinance is.
Second – Yes that’s correct, you do not include Property Taxes on a GFE. We’ve had several loans where we financed them and you have to add them to your loan amount, therefore increasing it and making the new money rescindable.
Regardless though, if this was the consumer’s primary dwelling and it was a refi, it would have been a rescindable loan anyways. Now if you’re just stating that you used one ROR form vs. another… well that’s a different story, but from what I can tell on your post, this is how I feel.