Reg Z - How should lender-paid mortgage broker compensation be disclosed?

Compliance > Regulation Z - TILA / TRID Specific > Closing Disclosures
Q:  How should lender-paid mortgage broker compensation be disclosed?
 
A.  Under the Reg. Z integrated mortgage disclosure rules, lender-paid mortgage broker compensation would be disclosed on the Closing Disclosure, page 2, in the Origination Charges section.  As the charge is being paid by the creditor, it would be reflected in the “Paid by Others” column.  The disclosure of the charge may include the letter “L” in parentheses, i.e. “(L)” to the left of the amount in the column to designate those charges paid by the creditor.  This is supported by 12 CFR 1026.38(f)(1). 
 
Besides the Regulation Z support, the CFPB discussed the issue of lender-paid mortgage broker compensation in their November 18, 2014, webinar entitled “TILA-RESPA Integrated Disclosures, Part 4 – Completing the Closing Disclosure.”  In that discussion, the presenter clarified that this would not be disclosed on the Loan Estimate, but would be reflected on the Closing Disclosure. 
 
 
Supporting information can be found in Regulation Z, at the citation noted above, which may be accessed here: http://www.ecfr.gov/cgi-bin/text-idx?SID=437e20ad4bc5429efb9c0cc234dd9eb4&mc=true&node=pt12.9.1026&rgn=div5
 

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