We sell loans on the secondary market as a correspondent lender. Loan closes in our name with our funds. I've got a loan that the first lender I sent it to denied for appraisal. Another lender will take the loan but their fees are higher. We can't change the origination fees on this to reflect their higher fees, correct? I don't think this is a changed circumstance but not everyone here agrees with me.

Second issue- I could show this app. as denied and have borrower reapply. Issue then is the appraisal is dated before application and my lender says that we would need a new appraisal dated after the new app. date. I don't understand why. We ordered through an AVM so that it is HVCC compliant. Has anyone ran into this issue?

If it's not a program change, I wouldn't think you could qualify it as a CC.

YOu would think the appraisal could be transferrable (or did they take that ability away?!?)

First, is this loan closed or not?

Second, it is a changed circumstance if you're changing loan products. This is a different product from a different investor so, imo, yes, you can redisclose. See 1/28/10 p15 1) (2) Informaiton particular to the borrower or transaction that was relied on in providing the GFE...

The loan has not closed.

The product is the same, conventional 30yr 2nd home. This lender will accept the appraisal and the other wouldn't. Comps are far away. Difference in decision was just the underwriter's opinion that the appraisal is acceptable.

I'm not so convinced of that, TR. Sounds like closed loan refused by investor 1. Say it's a conv 90%, it's still a 90% , just going now to investor #2. I don't see that as a program/product change.

RR Joker -I thought it would be transferrable too. Lender may have it wrong that's why I asked if anyone knew this to be an HVCC issue or a lender issue.

Thanks.

Or that may be their policy. I wonder if they would accept it if the appraisal firm re-assigned it and gave a "certification letter" stating the value and /or info has not changed with current date?

Well, it's not a closed loan.
But, isn't this like saying a Jonathan Apple is the same as a Granny Smith apple?
Yea, it's a 30 yr fixed with investor x that you GFE'd to the borrower.
Now you have to go with a 30 yr fixed with investor y who charges different fees.

I'm gonna hit this one too, I'm sure. Why don't you email HUD and see what they say specifically to an investor change? I'll give it a shot too and we can come back and compare notes.

Thanks Truf and Joker. Glad to see I'm not the only one that is unsure on both of these issues. I'll email HUD on the changed circ. and get with my lender to see if the appraisal is their rule or their interpretation of HVCC. I'll also check into the recertification. Thanks again! I'll update if I hear back.

Truf, I hope that really is the case. I like your logic better than mine! LOL!

Truf, I've gotten a response from HUD already. Shocking isn't it! Here it is:

From the FAQs, GFE - General regarding FHA correspondent:

15) Q: If an FHA approved loan correspondent closes a loan in its name and is not table-funded by its sponsor, but rather is funded from its own funds or from a warehouse line of credit which it controls, is the correspondent considered a mortgage broker or a lender?
A: If an FHA approved loan correspondent closes a loan in its name and is not table-funded by its sponsor, but rather is funded from its own funds or from a warehouse line of credit which it controls, the correspondent is considered to be a lender.
Please also see my response below.

Thank you,
Laura Gipe
My email and additional response:

My bank is a correspondent lender for secondary market loans. We close in our name and use our funds for closing but our approvals come from the lenders that we are selling the loan. I have a purchase situation where I issued a 2010 GFE and included the lenders fees in the origination charge. This lender denied the loan because of the appraisal not being acceptable. I have another lender that will accept the appraisal. This second lender has higher fees than the first. Is this a changed circumstance where I could increase the origination fees to reflect the new lender’s fees since I could not get approval on the loan that I originally quoted. No, it is not considered a changed circumstance.
From the FAQs, Changed Circumstances:
8) Q: Are the following sufficient to establish ―changed circumstances‖ consistent with 24 CFR § 3500.7(f)?
i) A mortgage broker issues a GFE that the lender does not accept.
A: This does not constitute a changed circumstance.

We have just came across this very scenario and was wondering how you are handling the increased fees.

The original investor denied the loan based on the appraisal so our GFE issued of course had the fees of the original investor. A new investor who will take the loan has different fees. How are others handling this?

Changing investors/lenders is not a changed circumstance. In addition to the answer HUD gave Roltyde see page 18 of the FAQs


xv) A mortgage broker issues a GFE based on one lender‘s loan products and origination fees, but places the loan with a different lender.
A: No, this would not constitute a changed circumstance.


Your options as I see them is to accept the fess quoted or deny the loan request and have the consumer start over with a new loan request.

We just ate the extra fees. In this case, it was only $110. I've spoken with my lenders again about the option of denying the first application and starting a new one for the next investor. My concern with that is the appraisal will be dated before the application. One investor said it shouldn't be an issue since the appraisal is ordered in our name for our borrower. Another investor is unsure. I believe the need for a new application will really come in play for us when rates have increased between the lock with the first investor and their denial and the subsequent lock with the second. Without a new application, I think we'd be stuck with the old rate and sometimes that is not feasabile.

Thanks Dan and RolTyde. Not really what I wanted to hear, but then again, what is regarding RESPA these days.