Application taken in Feb to refinance duplex (secondary market loan). Appraiser could not find comparables for a duplex so he appraised one side and then doubled the amounts (or something weird like that…). Of course when the file got to underwriting it was denied. Application was then split into two different loans in April. Original appraisal (on one side of duplex) was used for one of the loans, but it has now expired. Other documents and also rate lock have also now expired on both applications, while waiting on appraisal for second side of duplex. Since rates have dropped, originator wants to re-lock loans at a lower rate than before and also increase origination fee from ½% to 1%. All other fees will remain the same. I realize that we have to issue a revised GFE because the rate is being re-locked. Are we also allowed to change the origination fee in this scenario? Thank you.

No. What is the change in circumstance allowing you to increase the origination fee? And I suggest someone step up to the plate and decide whether or not the bank wants to make this loan. An appraisal on one side of a duplex (assuming this is one piece of titled property) is rediculously unacceptable in any format.