Not a lawyer, from a purely many years real estate paralegal, former residential loan auditor for CT banks:
It is a very fine line, however, for attorney's personal representation to the purchaser/borrower or seller, the attorney is not required to disclose that fee under federal or state law to the other party or lender. For example, the seller's attorney may be providing personal representation to the seller only, his legal advice and work product having nothing to do with the purchaser's "loan," therefore, Seller's attorney (P.O.C.) [disclosing that there is a fee, however, it is paid outside the closing transaction and that fee is nobody's business but the client's]. For example, the purchaser/borrower's attorney may NOT be the "settlement agent," "title insurance agent," or represent the lender, his legal advice and review of the documents is strictly for the client's benefit (P.O.C.). In moldy pre-non-attorney refinance days, you would see an attorney's fee on the "settlement fee" line [fee for lender work being disclosed, borrower required to pay a fee which the lender often set] and on the attorney fee (attorney fee for additional representation such as reviewing/negotiating the purchaser & sale agreement) line of the HUD.
Kevin, correct me if I am wrong, but in a nutshell the attorney fee disclosure is for attorney services required by the lender, that benefit the lender, in connection with the mortgage loan, and paid for by the borrower. What/how disclosed is a fine line. Over many years I've seen it crossed by lenders, attorneys, mortgage brokers, real estate agents, purchasers/sellers (such as cash back deals after the closing outside the attorneys' presence) off the settlement statement - usually without financial harm to anyone; i.e., no one but the auditor cares. Good news is on a regular basis a percentage of randomly chosen residential loan HUD-1s ARE reviewed by independent (lender and secondary market purchaser), state and federal auditors - bad things are caught eventually ... it's a matter of time, luck, and auditor knowledge, which is why over the years the HUD-1 changed and the HUD-1A appeared.
to post a reply:
login - or -
register