#Calex impounds on the loan estimate full
The lender collects enough in escrow to pay your taxes in FULL when due plus have a residual in your escrow of approx 2 months (that is the maximum allowed buffer according to RESPA). So the entire tax bill is to be paid by you since the seller already paid their portion directly to you in the form of a credit at closing. The seller gave you a credit for the unpaid real estate taxes that the seller owed for this year prorated to the date of closing. Alternatively, if the creditor includes the cost of the LLPA in the interest rate, and then allows the consumer to pay a point to reduce the interest rate, the charge would be disclosed as a point on the Loan Estimate.So why did my lender take payment of two months of property tax interest at closing, when I pay it monthly through my mortgage bill? If the LLPA is charged at closing as a flat origination charge, the charge should be labeled an origination charge. However, if the creditor charges an upfront fee for the LLPA, the creditor should disclose the fee based on how it is charged. If the creditor does not charge the consumer an upfront fee, but rather passes the cost of the LLPA to the consumer through interest, the creditor does not need to disclose this charge as it is not considered a settlement charge under the rule. When a creditor pays a LLPA to the secondary market purchaser, the creditor may have to disclose the charge in certain situations.
If there are no charges that reduce the interest rate, creditors should leave the points line on the form blank rather than mark the line “N/A”. Any charges other than points require clear and conspicuous terminology that describes the service. This requirement prohibits creditors from identifying origination fees as points as a means of preserving its tax deductibility for the consumer.
Only points charged in connection with an interest rate reduction may be disclosed as points on the Loan Estimate. This is the case even if the charge is a portion of the loan amount. If the charge is not intended to reduce the interest rate, then it is not a point and cannot be disclosed as such. When disclosing points and fees, creditors should determine whether the charge is associated with origination costs or whether it is a form of interest. To the extent the consumer will pay for these charges, they should be disclosed under the Services You Cannot Shop For section. However, some charges are required to be itemized, including points and Loan-Level Price Adjustment (LLPA). Generally, the creditor decides how it wishes to itemize the origination charges section on the Loan Estimate. Today in part two, we address disclosure of points and fees. In part one of this blog, we addressed the disclosure of interest rates on the Consumer Financial Protection Bureau’s Loan Estimate, which starting will replace the current GFE and early Truth-in-Lending Disclosure for loan applications received on or after Aug.
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