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#1623762 - 11/02/11 09:09 PM Borrower pay for Appraisal?
complofcr Offline
100 Club
Joined: Apr 2010
Posts: 183
SE USA
We have a borrower that wants to pay his loan fees in cash, including the appraisal fee. The appraiser says he cannot accept payment from the borrower since the bank ordered the appraisal and that the bank must pay the appraisal fee. I can't find anything, but does anyone know of anything in the new guidelines about this?
Thnk you!

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Lending Compliance
#1623800 - 11/02/11 10:15 PM Re: Borrower pay for Appraisal? complofcr
Truffle Royale Offline

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Joined: Jul 2003
Posts: 17,395
The borrower doesn't pay anyone directly in cash. He can pay you, the bank, in cash and then you pay all parties involved in the loan transaction.

And your appraiser is right. His business is with you, not the borrower. The regs prohibit a borrower from hiring an appraiser in a loan transaction. You need to maintain that distance by having the bank pay the bill.

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#1623868 - 11/03/11 01:04 PM Re: Borrower pay for Appraisal? Truffle Royale
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
From the guidelines:

The following guidance documents continue to be in effect: The 2005 Interagency FAQs on Residential Tract Development Lending and the 2005 Frequently Asked Questions on the Appraisal Regulations and the Interagency Statement on Independent Appraisal and Evaluation Functions.


From the 2005 FAQs:

14. Can a borrower pay the appraiser directly for an appraisal that is ordered by the lender?

Answer: Since the regulated institution has engaged the appraiser for its services, the regulated institution should be the party to remit payment to the appraiser. The regulated institution may seek reimbursement from the borrower for the cost of the appraisal. However, the borrower may not recommend an appraiser to the institution or select the appraiser.
_________________________
The opinions expressed are mine and they are not to be taken as legal advice.

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#1623933 - 11/03/11 02:51 PM Re: Borrower pay for Appraisal? Dan Persfull
complofcr Offline
100 Club
Joined: Apr 2010
Posts: 183
SE USA
Thanks Dan! I was trying to find something in the newer guidelines. Didn't look at those.

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