Compliance Memo C2021-06 Borrower Paid Seller Fees
This memo is a notification of new procedures regarding Borrower-paid seller fees per the purchase contract.
In this competitive market, buyers and their realtors are getting creative with their offers. More and more, we are seeing buyers agreeing (and purchase agreements reflecting) to pay all or a portion of the seller’s closing costs or realtor commissions. This memo outlines Gold Star’s disclosure requirements in the event buyer has agreed to pay any portion of the seller’s closing costs.
*This policy is subject to change
This credit must be disclosed on your Loan Estimate and Closing Disclosure
- To disclose on your Loan Estimate, you will list as “Misc. Seller Fee” in section 1300 under the double starred lines (1310-1320) if being applied to seller closing costs. This will be reflected in section H of your LE.
- To disclose as borrower paying a portion of the realtor commission on your Loan Estimate, you will list in section 700 (701 or 702) as paid by borrower.
- When disclosing on the Closing Disclosure, “Misc. Seller fee” needs to be removed from section 1300 on your itemization and added as a lump sum credit on page 3. It needs to read as “Seller fees paid by borrower” and should be listed in section K as Adjustments (lines 05 or 06).
- When disclosing as borrower paying a portion of realtor commission on the Closing Disclosure, it will remain in section 700 as listed on the Loan Estimate.
- No portion of this credit can be financed into your loan amount
- Underwriting will need to verify borrower has these funds to cover credit
- Credit cannot exceed costs
- This is a valid change of circumstance (COC) if a Purchase Contract or Addendum is obtained after initial disclosure or throughout the loan process.
If you have any question or need further clarification, please reach out to the me directly at email@example.com. Thank you!