2010 is here and the new RESPA HUD-1 goes into effect.
Many of our customers have inquired as to the placement of the
reQuire release tracking fee on the new HUD-1 settlement
statement. reQuire cannot advise its customers as to
where the fee should be placed - such advice must come from your
attorney. I can, however, let you know my understanding of the
HUD-1 third-party fee question based on my research, discussions
with other attorneys, participation on RESPA discussion panels, and
feedback from various presentations I've conducted over the past
year. Here is the summary of my findings:
Question: Where do I place the reQuire
release tracking fee in the new HUD-1 form?
Answer: In a Sales transaction, the fee
should be included in the 1300 series under the Seller's
column.
If the transaction is a Refinance, the fee should be placed as an
"outside the column" third-party fee under the 1101 series (Title
Services and Lender's title insurance from GFE #4). The payee
should be reQuire, LLC, and there should be a separate check cut
for payment out of the disbursement account. This also means
you need to include this third-party fee in your schedule fee list
to the lender so that a proper GFE can be prepared.
Over all, I believe you should keep the following in mind
when discussing this with your counsel:
1. The fee should be clearly distinguished as a
third-party service fee,
2. The Payee should be reQuire, LLC, and
3. The fee should not be combined with other service
fees that you or other third-party service providers are
collecting.
4. You may not mark-up the fee.
While I believe that in a Refinance transaction the fee should
be disclosed in the subsection of the 1101 series, I also believe
that placement of the fee in the 1300 series of the HUD-1 as a
"Release Tracking and Search" fee to require would not be
fatal.
I leave you with this: I cannot serve as counsel
for reQuire customers and recommend that you seek a final
determination of this and any question related to RESPA compliance
from your underwriter's counsel or your corporate counsel. You
are welcome to have your counsel contact me
should they have any questions or wish to discuss this issue.
We at reQuire value your business and wish you and your family a
Happy and Prosperous New Year!