Disclosing Seller-Paid Fees on the Closing Disclosure

Question:

I had a question on Real Estate agent commissions. We have always shown seller-paid items on our borrower’s (buyer’s) Closing Disclosure (CD). We had a Real Estate agent ask us not to show the seller-paid commissions on the buyer’s CD. Do you have any thoughts on this? Is there anything in the regulation that says seller-paid items should be disclosed to the buyer on the CD?

Answer:

Great Question!

Real Estate agent commissions must be included on the borrower’s (buyer’s) version of the CD regardless of who pays for them. This was a specific change with TRID and is considered pertinent information for the buyer to have.

1026.38(t)(5)(v) of Reg Z explains what information may be left off the buyer’s and seller’s versions of the CD.
Real Estate agent commissions, must be shown in “Section H” per the commentary to 1026.38(g).
Paragraph (v) permits information required to be disclosed by paragraphs (f) and (g) WITH RESPECT TO COSTS PAID BY THE CONSUMER be left blank on the disclosure provided to the SELLER. But it doesn’t permit the information to be left off the other way around.
You are required to disclose Real Estate agent commissions paid by the seller on the buyer’s copy of the CD.

The only part of the seller’s side of the transaction that the buyer doesn’t have to get is the “Summaries of Transactions” on the third page of the CD.

Closing Disclosure, Compliance, Mortgage, TRID

Disclosing Seller-Paid Fees on the Closing Disclosure

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