CFPB HMDA FAQ Disc Pts 1 - When collecting and reporting discount points, does a financial institution collect and report the total combined discount points paid by the borrower, seller, and any third party?

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Q:   When collecting and reporting discount points, does a financial institution collect and report the total combined discount points paid by the borrower, seller, and any third party?
 
A:   Yes, section 1003.4(a)(19) provides that for covered loans subject to the disclosure requirements in Regulation Z, 12 CFR 1026.19(f), a financial institution reports the points paid to the creditor to reduce the interest rate, expressed in dollars, as described in Regulation Z, 12 CFR 1026.37(f)(1)(i), and disclosed pursuant to Regulation Z, 12 CFR 1026.38(f)(1).  For covered loans subject to this requirement, a financial institution reports the total discount points paid to the creditor to reduce the interest rate regardless of which party paid the points.  This total is the sum of all amounts disclosed on Line A.01 of the Closing Cost Details page of the Closing Disclosure.
 
For example, if both the borrower and seller paid discount points to the creditor to reduce the interest rate on a covered loan, a financial institution reports on its HMDA Loan/Application Register the sum of the amounts paid by the borrower and seller, as disclosed on Line A.01 of the Closing Cost Details page of the Closing Disclosure.
 
For general information about HMDA reporting of discount points, see section 5.28.3 of the HMDA Small Entity Compliance Guide
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This Q&A was based on information contained in the Consumer Financial Protection Bureau’s HMDA FAQs Compliance Aid, which may be updated from time to time.  This HMDA-related issuance may be found here: 
 
 

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