jainen Posted February 24, 2011 Report Share Posted February 24, 2011 Have you noticed they are now showing hidden points on settlement statements for refinance? I'm looking at $501 "origination charge" debited in addition to loan payoff, title insurance and other closing costs. Then there is $618 "points" credited in addition to the loan amount. Do I amortize the net (which is less than zero)? Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted February 24, 2011 Report Share Posted February 24, 2011 I raised that issue a couple of weeks ago. I'll try to find the thread. Consensus was to add to basis. Crazy, isn't it? Our financial institutions further obfuscating transactions... Quote Link to comment Share on other sites More sharing options...
Margaret CPA in OH Posted February 24, 2011 Report Share Posted February 24, 2011 The topic was Negative Loan Origination Fee on Feb. 3. I don't know how to link but I'm sure you can find it. Quote Link to comment Share on other sites More sharing options...
jainen Posted February 24, 2011 Author Report Share Posted February 24, 2011 >> Negative Loan Origination Fee on Feb. 3<< That's it, thanks! I don't think it's a basis adjustment in a refinance. If the SELLER pays points (or other closing costs) that could be an adjustment to sales price. But, as Medlin explained, negative points is just a way to describe a higher interest rate. In other words, the new loan amount wasn't enough to payoff the old loan and closing costs. So the bank bumped the interest rate, which allows them to sell the paper for that much more. Quote Link to comment Share on other sites More sharing options...
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