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Banking Interpretations

NYSBL 6-L
Gen. Reg. Part 41

June 7, 2007

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Subject Fw: NY Part 41 clarification concerning seller paid points and fees

As discussed and as stated in the 3/29/06 interpretation, the general rule in New York is that points and fees paid by a seller, lender or other third party are included in the New York points and fees calculation. I trust that this clarifies the matter to your satisfaction.
 
Alan M. Weinberg
Assistant Counsel
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Forwarded by Sam Abram/legal/NYSBD [---]

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To <sam.abram@banking.state.ny.us>
 
05/30/2007 01:00 PM

Subject NY Part 41 clarification concerning seller paid points and fees

Dear Mr. Abram,

I am seeking clarification concerning the above as it relates to two (2) Staff Interpretations contained on the Banking Department's website. Specifically, l am referring to the 6/13/06 Staff Interpretation under the NYSBL 6-L and General Regulations of the Banking Board Part 41 by Alan Weinberg and the 3/29/06 Staff Interpretation under GRBB Part 41 also by Alan Weinberg. The former interpretation discusses the NY Total Loan Amount Calculation and the latter the Reg Z commentary.
 
In the 3/29/06 interpretation, Mr. Weinberg states "Points and fees paid by a seller, lender or other third party are included in the New York points and fees calculation... ".

In the 6/13/06 interpretation, Mr. Weinberg states "We believe that, to the extent that a credit in favor of the borrower is clearly applied against a component of the 'points and fees' calculation, those points and fees in question should not be considered to be charged to the borrower.”

While I believe Mr. Weinberg was addressing the impact of seller paid points and fees (lump sum versus itemized) to the total loan amount calculation in the 6/13/06 interpretation, I find it necessary to clarify, or reconcile, if you will, the above two (2) statement as they relate to the inclusion or exclusion of seller paid points and fees when determining what points and fees are to be included as such.

My question is: Are points and fees charged to the borrower but paid by the seller (as itemized on the HUD-1 Settlement Statement) included as points and fees (regardless if the points and fees are received as compensation by the lender or paid to a third party)?

Thank you,

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