We are still handling OTI the same way we did it when the new RESPA rules went into effect in January because I was waiting for more clarification - or something - from HUD. This is what we do (which I believe follows instructions in the FAQ):
A) Always put OTI on the GFE for home purchase loans.
B) Put OTI in the borrower’s column on the HUD-1.
C) Show a credit for OTI in the 200 Series and a charge to the seller in the 500 series.
D) The comparison chart contains amounts in the GFE and HUD column for OTI.

Our Software vendor seems to be making changes to comply with the RESPA Roundup which says:
“If the consumer did not purchase a service that was listed on the GFE (usually owner’s title) there should be nothing entered in that line on Page 2 of the HUD-1 and the estimate of the charge should not appear on the comparison chart on Page 3 of the HUD-1.”

1) Is the “consumer” in this case our borrower or does it mean any consumer (seller) associated with the loan?
2) Is HUD saying to show the OTI in the Seller’s column of the HUD-1?
3) Does HUD still expect us to put the OTI on the GFE for a purchase?

We usually pay for the flood determination rather than passing the fee to the consumer. We handle it basically the same way we do the OTI.
•Does this also fall off of the comparison chart now?

What I want to ask is Why? Why? Why? But I know it’s pointless so I won’t.

Taken from the Banker Online Blog.

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Could someone please provide the following correct information..????

I deal with 5-6 different lenders and I have seen page 4 of the HUD prepared 3 different ways...

#1 The YSP is showing as a credit "Paid to the Borrower"

#2 The YSP is showing as a credit "Paid to the lender"

#3 The YSP is showing as a credit "Paid to our Bank" (our loans are table funded)

I've experience considerable delays with some of my closing wires due to confusion that is created when companies do not complete page 4 of the HUD in a consistent manner. I was told that page 4 of the HUD is more for disbursement purposes and does not have to meet the same standards as pages 1, 2 & 3 on the HUD... I know it sounds nuts (you would have thought with all the RESPA changes there would only be "1" acceptable way to show the funds disbursements on page 4)..... Please let me know if any one else has or is encountering this same issue.. Thanks.

by Loan-er September 19, 2010 9:52 PM

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i agree, the GFE/HUD-1 may have been constructed with good intentions, but is a mess. Every lender has a different interpretation, and a competent title agency is most important. the change of circumstance is another gem(gov't at work).
by MikeM-NJ September 20, 2010 6:06 AM

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Yes, the HUD-1 new HUD-1 form is a difficult beast to master. However, it only has 3 official pages, not 4. Page 2 is used to show loan originator charges and credits to the borrower for YSP in lines 801 and 802. Any additional pages detailing fees and costs are not required by RESPA.

It sounds like someone in your company (or at the companies you deal with) has created" a "page 4" for internal disbursement purposes. Perhaps it is simply the closer's disbursement record. In any event, since it is not governed by the RESPA rules closers and others will fill it out in a way that makes sense to them, which will likely vary considerably.
by oldbe September 20, 2010 10:24 AM

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Old be is right, you are going to see variances in the disbursement page. It is purely a rehash of page 2 fees showing where they are going, it does help on the title end when trying to balance a wire...
by Donktard Borker September 20, 2010 10:31 AM

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