We are trying to make a R/E loan and received the application in June. Yes, June! A lien was discovered and the owner has finally agreed to pay the lien. The borrowers have already paid for the appraisal and flood determination. We never denied the application and the application was not withdrawn. Do we just continue as is?

Did you issue some sort of conditional approval?.....conveyed to the customer that the loan is approved conditioned upon the payment of the lien?

If not, you're in Reg B/FCRA violation territory.

Assuming you gave the GFE/TIL and the info re:lien was properly conveyed you're still good. Altho you may need to update appraisal, du, etc.