[wburd]

During the Total TRID Training (part 2). It was mentioned that if we have loan costs (property report, flood, appraisal, recording fee) that are always lender paid and the borrower never pays them, that these items DO NOT need to be listed on the Loan Estimate and Closing Disclosure. Do I understand this that correctly? Our Home Equity loans have a single Origination Fee that the borrower pays, all other costs are always paid by the bank. So our Loan Estimate for these types of loans could just show the Origination Fee paid by the borrower and that is it (LE & CD)?

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[jholzknecht]

Thanks for participating in the four-part webinar. Parts III and IV will be on Tuesday and Wednesday of this week.

The subject of your question is addressed in Lender Credits FAQ 3 (https://www.consumerfinance.gov/compliance/compliance-resources/mortgage-resources/tila-respa-integrated-disclosures/tila-respa-integrated-disclosure-faqs/#lender-credits). The FAQ states, in part, “The TRID Rule does not require disclosure of a closing cost and a related lender credit on the Loan Estimate if the creditor incurs a cost, but will not charge the consumer for that cost (i.e., the creditor will “absorb” the cost). In such cases, the absorption of the cost or charge would not “offset” an amount paid by the consumer. However, a creditor must disclose a closing cost and related lender credit on the Loan Estimate if the creditor is offsetting a cost charged to the consumer. Comment 37(g)(6)(ii)-2.”

“To illustrate, assume a creditor will require an appraisal, credit report, flood determination, title search, and lender’s title insurance policy in connection with a particular mortgage loan transaction. Further assume, that the creditor will incur attorney fees for loan documentation and recording fees in connection with the transaction. If, based on the best information reasonably available, the consumer will only pay an application fee of $500 and the creditor will absorb all other costs, the creditor is not required to disclose the appraisal fee, credit report fee, flood determination fee, title search fee, lender’s title insurance policy premiums, attorney fees for loan documentation, and recording fees on the Loan Estimate. Conversely, if the creditor agrees to provide a lender credit sufficient to offset all of these charges, except the application fee, the creditor must disclose the charges in the Loan Costs table and Other Costs table, as applicable, and include a corresponding total amount in the Lender Credits disclosure on the Loan Estimate.”

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