I am conducting a RESPA review and noticed that on an initial GFE the appraisal fee was listed as $450. On a susequent GFE, after locking the rate, the appraisal fee was listed as $285. This was apparently due to the fact the borrower made a payment outside closing of $165. No mention of any payment or credit on GFE.

Should they have listed the entire fee and then shown a borrower credit for the $165? If so, where does the credit go? Thanks!

Based on the information provided the subsequent GFE should not have been lowered from $450 to $285 based on part of the appraisal cost being paid outside of closing. The GFE should never account for items paid outside of closing.

However, when this loan closes the settlement statement should include $165 outside of the borrower's column as "P.OC. borrower" on line 804 and the remaining cost due at settlement within the borrower's column on line 804. The entire amount (POC + due at closing) must flow into the tolerance comparison chart.

The $450 should have shown in Block 3. The credit would be shown in Block 2 or the 200 series of the HUD. The 200 series would be the preferable choice for us.

Thanks Guys!