Closing Costs

HMDAVision® empowers users to drive insights about Loan Closing Costs starting with 2018 data.

Closing Costs

Closing costs are the sum of all costs that the borrower pays to close the loan. These may include origination charges, discount points, appraisal fees, recording fees, Title insurance, etc.

Given the data that we have at our disposal, the closest approximation to Closing Cost is the “Total Loan Costs” plus “Total Points and Fees” data fields in HMDAVision®, which we call Closing Costs. We combine these two original data fields because at a single mortgage transaction these two are mutually exclusive. Total Points and Fees are only reported if we have a loan that is subject to Reg Z but not subject to TRID. An example is a loan for manufactured home with no land. Analysis on Closing Costs in HMDAVision® is available on the Closing Costs sheet.

You can also analyze:

  • Origination Charges

  • Discount points

  • Lender Credits

Where Does the Data on Closing Costs Come from?

The data comes from the Closing Disclosure via the annual reporting requirement under Reg C for covered institutions and loans. If the loan is subject to Ability-to-Repay, and Closing Disclosure was provided to the borrower, then the data point is reported under Reg C. The amount of total loan costs comes from Line D of the Closing Disclosure. Total Loan Costs will include Origination Charges and Charges for all services paid by the borrower. See below for reference.

But if no disclosure was provided to the borrower, then the lender reports “Total points and fees”, which we have included in the definition of Closing Cost field in HMDAVision®.

In HMDAVision® you can analyze “Origination charges” separately. These include discount points, the application fee and the underwriting fee. Origination Charges represent Line A in Closing Disclosure. In the example below, Origination Charges of $1,802 were disclosed to borrower and Origination Charges of $1,802 were reported under Reg C. Discount points are offered to borrowers to reduce the interest rate as listed on the Closing Disclosure A.01 (as can be seen above - they are $405 or 0.25%.

The Lender Credits are listed on the closing disclosure in part of Section J (see second row below).

In sum, when you use the Closing Costs analysis, please keep in mind that this is the borrower’s cost of obtaining the loan. It excludes the following:

  • Recording fees

  • Prepayments made for home insurances/mortgage insurance premiums

  • Prepaid interest

  • Prepaid property taxes

  • Escrow account payment

  • HOA fees

  • Title insurance (Owner’s title insurance which usually is optional).

Notes:    

(1) The basis for this note is the CFPB publication: Introducing New and Revised Data Points in HMDA, published August 30, 2019.