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#2027499 - 07/16/15 03:44 PM
Appraiser for the LE
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100 Club
Joined: Feb 2013
Posts: 102
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We do not allow our customers to shop for their appraiser, we bid them out during the transaction process. We understand the LE requires a service provider to be listed for items you can't shop for. How should be list this, we have about 10 different Appraisers we could possibily use, and they all run about the same amount (which is what we currently list on the GFE). Anyone else facing this issue? Any Suggestions?
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#2027501 - 07/16/15 03:46 PM
Re: Appraiser for the LE
Beagles Rule
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Power Poster
Joined: Oct 2009
Posts: 9,232
OK
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No, service provider lists are provided for services you require that the borrower CAN shop for. You won't be giving them a provider list for appraisers.
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#2027504 - 07/16/15 03:49 PM
Re: Appraiser for the LE
Beagles Rule
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10K Club
Joined: Sep 2002
Posts: 13,965
TN
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Out of curiosity - who wins the appraisal bid?
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#2027505 - 07/16/15 03:50 PM
Re: Appraiser for the LE
Beagles Rule
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100 Club
Joined: Feb 2013
Posts: 102
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Right, so if we don't let them shop, do we have to show them on the LE which service provider we will be using?
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#2027507 - 07/16/15 03:51 PM
Re: Appraiser for the LE
Beagles Rule
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Power Poster
Joined: Oct 2009
Posts: 9,232
OK
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No, you don't show the provider on the LE. You'll show who ultimately received the appraisal fee on your Closing Disclosure.
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#2027508 - 07/16/15 03:51 PM
Re: Appraiser for the LE
Beagles Rule
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100 Club
Joined: Feb 2013
Posts: 102
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Our underwriters chose it, I am not sure. We have a list of approved appraisers.
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#2027522 - 07/16/15 04:15 PM
Re: Appraiser for the LE
Beagles Rule
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10K Club
Joined: Aug 2002
Posts: 47,673
Bloomington, IN
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Our underwriters chose it, I am not sure.
If you're not sure then you need to become sure how the appraisers are chosen.
From the Interagency Guidelines:
. . . An institution should establish reporting lines independent of loan production for staff who administer the institution’s collateral valuation program, including the ordering, reviewing, and acceptance of appraisals and evaluations. . . .
For a small or rural institution or branch, it may not always be possible or practical to separate the collateral valuation program from the loan production process. If absolute lines of independence cannot be achieved, an institution should be able to demonstrate clearly that it has prudent safeguards to isolate its collateral valuation program from influence or interference from the loan production process. In such cases, another loan officer, other officer, or director of the institution may be the only person qualified to analyze the real estate collateral. To ensure their independence, such lending officials, officers, or directors must abstain from any vote or approval involving loans on which they ordered, performed, or reviewed the appraisal or evaluation.
Underwriters are part of the loan production staff. IMO they should not be taking part in choosing the appraiser. If they are then the underwriter choosing the appraiser should not be touching the file other than choosing the appraiser and their independence of the transaction should be well documented.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#2027768 - 07/17/15 12:49 PM
Re: Appraiser for the LE
Beagles Rule
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10K Club
Joined: Aug 2002
Posts: 47,673
Bloomington, IN
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From the Reg:
(5) Definitions. For purposes of this paragraph (d), the following definitions apply:
(i) Loan production function. The term “loan production function†means an employee, officer, director, department, division, or other unit of a creditor with responsibility for generating covered transactions, approving covered transactions, or both.
From the Commentary B'viles cites:
. . . . Credit administration and risk management includes, for example, loan underwriting, loan closing functions (e.g., loan documentation), disbursing funds, collecting mortgage payments and otherwise servicing the loan (e.g., escrow management and payment of taxes), monitoring loan performance, and foreclosure processing.
In my world our underwriter approves the loan. In other FIs I've seen where their underwriter was the person that reviewed the file to insure all the secondary market conditions were met before the loan closed. So based on what you define as an underwriter I see a possible conflict between the Reg. and the Commentary. But the Reg is specific that a person approving the covered transaction is part of the loan production function.
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The opinions expressed are mine and they are not to be taken as legal advice.
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#2036385 - 08/30/15 02:08 PM
Re: Appraiser for the LE
raitchjay
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Platinum Poster
Joined: Aug 2006
Posts: 645
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So, the name of the appraiser who is receiving the appraisal fee is not listed on the loan estimate, but must be named on the closing disclosure? I just wanted to make sure I understand that. We had that question come up recently. Is that true of all fees? The names of the recipients paid must be listed on the closing disclosure, but not the loan estimate?
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#2036387 - 08/30/15 03:55 PM
Re: Appraiser for the LE
Beagles Rule
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10K Club
Joined: Jul 2001
Posts: 84,327
Galveston, TX
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There is no change in this regard between the use of a GFE/ HUD-1 and LE/CloD. You have never had to identify the specific provider on the GFE. The same is true with the LE.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2036764 - 09/02/15 02:38 AM
Re: Appraiser for the LE
Beagles Rule
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10K Club
Joined: Jul 2001
Posts: 84,327
Galveston, TX
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If you have variances in the charges you receive from appraisers in your area then you have a couple of options. You can either negotiate a standard fee that you will pay your appraisers. Or you can assign the appraiser off of your rotating list at the time of application and quote that appraiser's price and if the applicant doesn't go through, that appraiser just happens to not receive that assignment.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com
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#2037340 - 09/04/15 03:23 PM
Re: Appraiser for the LE
Beagles Rule
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10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
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If it comes in lower all the time, examiners might figure you were padding your LE appraisal estimate. That's not going to sit well with them. If you have reliable numbers for each of the three, using the highest of the three would, I think, be acceptable, unless you know you'll be using one of the lower-cost providers that early in the game.
The other possibility is to average the three prices and accept the fact that you'll be low once in a while, requiring a "cure" payment.
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