Compute the cumulative cost savings by adding up the cash inflows from the monthly payment savings, the difference of the unpaid principal balance between the two financing alternatives, and the initial cash outflows from paying loan origination fees
1.221-1(f)(2)(ii) and (f)(4), Example (2), discuss loan origination fees
. When the lender imposes such a fee, the amount is typically deducted from the loan proceeds.
The Uniform Settlement, prescribed under the Real Estate Settlement Procedures Act of 1974, clearly designates the amounts in question as points incurred in connection with the indebtedness by labeling them loan origination fees
, loan discount, discount points or points.
92-12 allows amounts designated as "loan origination fees
" on Veterans Affairs (VA) and Federal Housing Administration (FHA) loans to qualify for a deduction in the year paid so long as the other requirements of Rev.
The bank recorded positive performance in loan origination fees
, Bancassurance commission, fees from wealth management products and commission fees from foreign exchange, but its total impairment charge was higher than what it was during the same period last year.
GoLoan, the online mortgage services company designed to allow residential real estate brokers and their sales representatives to reap loan origination fees
in addition to their normal sales commissions, reported an 82% increase in the number of brokers signing up for its services over the same two-month period in 2001.
In PNC, the Tax Court had also relied on INDOPCO to require loan origination fees
to be capitalized.
By initiating the mortgage origination process directly with the consolidator, the consumer would trim steps and save on loan origination fees
and above-market discount points.
Designations such as "loan origination fees
," "loan discount," "discount points" or "points" are acceptable.
The 2000 IRS business plan lists a number of specific INDOPCO rulings (such as cyclical maintenance costs, sales commissions paid to obtain new customers, mutual fund launch costs and loan origination fees
) and indicates that more general guidance may be forthcoming.
In particular, loan origination fees
, and certain direct loan origination costs, are now deferred and recognized as adjustments to yield (interest income).
* The points must be designated on the Uniform Settlement Statement as points (for example, as loan origination fees
(including amounts so designated on Veteran Affairs (VA) and Federal Housing Administration (FHA) loans), loan discounts or discount points), and shown as paid from either the borrower's or seller's funds at settlement.