One. There have been two lawsuits in Texas over the issue of the reduction point/initiation fairy. A public case concluded that the rebate points (used to buy the interest rate) were „interest“ and were therefore not included in the 3% cap. A federal case concluded that an „origination fairy“ was a royalty for the granting of credits. Although the law of usury considers it as interest, it has taken it back in the ceiling of 3%. There were some discussions among experts on the topic of the „reduction point“. At least some think it is important that there is clear disclosure of the discount point and payment agreement and that the points are used to buy the price. I don`t think it`s absolutely necessary, but it`s certainly the safest route. One. Where a „free“ loan includes the loan fee and some or all third party fees, a credit should be mentioned in Block 2 of the GFE to offset all the fees included in the „free“ loan, resulting in a negative figure in Block A to cover the costs contemplated by third parties, which are, where appropriate, indicated in blocks 3 to 11. (April 2, 2010 HUD RESPA FAQS, GFE – block 2, page 30) On the HUD-1 or HUD-1A, fees were to be considered as a fundamental question poc: when Dad „sold“ the property to his son with the acquisition guarantee deed, did the father withdraw a note for his own funds? If so, you could refinance the whole thing as purchase money. .