Tagged: Cash to Close
June 2, 2015 at 11:46 am EDT #6942aslauterMember
We just started testing our Laser Pro documents and are having a balancing problem. We issue a general $200 Lender Credit towards closing costs and when I print my closing disclosure it shows properly in “J” on page 2 – but page 3 seems to be a problem. The credit is deducted from Cash to Close in the Summaries of Transactions and that amount is carried over (correctly I think) to page 1, but the credit is not deducted from Cash to Close in the Calculating Cash to Close section – so the Cash to Close blocks on page 3 in the two sections are different by the amount of the lender credit. In reading the reg it seems in completing the Calculating Cash to Close section that the General Lender credit isn’t accounted for in Total Closing Costs or included in “Funds for Borrower” – or anywhere that I can find – so I can see why it’s not coming up with the same figure, but it sure doesn’t seem right that the Cash to Close amount would not be same in all three blocks. Any help would be very much appreciated!!June 4, 2015 at 12:51 pm EDT #6946rcooperMember
That doesn’t seem to make sense to me either. The general lender credits should be included in “J” and carry over to the Total Closing Costs in the Calculating Cash to Close table. Here’s some information on general lender credits from Reg Z that might be helpful. Let us know what your thoughts are after reading this. Thanks.
1026.38(i) states the Calculating cash to close/Total closing costs/subheading “Final,” should state the amount disclosed under paragraph (h)(1) of this section.
1026.38(h)(1) is the sum of the costs disclosed as borrower-paid pursuant to paragraph (h)(2) and the amount disclosed in paragraph (h)(3) (General Lender Credits – See Commentary below) disclosed under the subheading “Total Closing Costs (Borrower-Paid).”
Comment 38(h)(3)-1 states that when the consumer receives a generalized credit from the creditor for closing costs, the amount of the credit must be disclosed under § 1026.38(h)(3). However, if such credit is attributable to a specific loan cost or other cost listed in the Closing Cost Details tables, pursuant to § 1026.38(f) or (g), that amount should be reflected in the Paid by Others column in the Closing Cost Details tables under § 1026.38(f) or (g).June 4, 2015 at 1:29 pm EDT #6948aslauterMember
Hey Robin I apologize but in looking at this again I totally misstated the problem and actually got it completely backward. I believe my Calculating Cash to close section is properly accounting for the general lender credit but it is not being accounted for at all in the Summaries of Transactions section. In this case my borrower is getting cash at settlement and the Cash to Close To Borrower is short by $200 in the Summaries Section. The Cash to Close amount in the Calculating section is correct. I’m trying to figure out where a general lender credit is accounted for in the Summaries section. When I read the regulatory text and the annotated forms it doesn’t seem to allow for it.June 15, 2015 at 11:12 am EDT #6965jholzknechtKeymaster
A general lender credit is included in the closing costs in both sections. In Calculating Cash to Close, at the top of page 3, the general lender credit should be included in “Total Closing costs (J)” In the Summaries of Transactions, at the bottom of page 3, the general lender credit should reflect Closing Costs Paid at Closing (J), which should be the Total Closing Costs (J) from Calculating Cash to Close at the top of Page 3 minus the Closing Costs Paid Before Closing, which is also displayed at the top of Page 3 in the Calculating Cash to Close section.
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