Would the following scenario be considered discouraging a person from applying?

An individual who wants to borrow to construct a home provides an anticipated loan amount, but does not yet have builder's specs/plans.

LO/LA tells individual, "We cannot accurately provide an appraisal fee amount without first having your building plans."

IMHO, there might be more "politically correct" ways of saying it, but I do not believe the LO is trying to discourage the applicant, only indicating that the fee is based on the plans. LO/LA could have probably said that the "appraisal fee may range from $xxx to $yyy, based on the additional information in the builder's plans". I do not think it would affect any of the other rights, since they do not know the loan amount.

The PC statement notwithstanding, maybe I should have phrased the question/posed the scenario a little differently...

An application is received - with a particular loan amount requested - can it be deemed "incomplete" without the building specs?

We're trying to avoid an appraisal fee quote on an LE (based solely on the applicant's estimate from a preliminary conversation with a builder) from having to be re-priced/re-bid once the specific details are known and the bank being responsible for the difference.

I think the building specs are a verification issue. They are not part of the application. If you have the 6 items for an application in TRID, how do you not have an application?

Agreed...grasping at straws.

I was interpreting (reading) as an application was provided without the requested amount because they didn't know yet. If the amount is there then there is an application. You can have a changed circumstance though if the amount changes.

This angst is all over the quoting of an appraisal cost??? Is it really that hard? You base the appraisal quote on the your typical deal - borrower equity required is XX%, lot cost is usually approximately XX% and loan amount will be the difference depending on whether they already own the loan. With that total you know the approximate construction contract and can estimate the appraisal. If those calculations are off when you get the specs or they are building a weirdasshouse, you adjust based on a changed circumstance.

Apparently, it's more difficult than one would imagine.

It stems from receiving an app without plans - ordering an appraisal quote for an LE - a timing delay (because plans are not completed timely) - the appraiser basically saying they cannot honor their quote because the original pricing was based on the expectation of a timely turn-around...now (several weeks later), due to the delay, the demand for their services has changed and they can't perform it without a premium to compensate them for rearranging their schedule - otherwise, we wait until it comes up in their queue.

a timing delay (because plans are not completed timely)

And that is not a changed circumstance?

Agree with Mr. Carey - I think this definitely constitutes a valid changed circumstance and you can issue a revised LE once you know the new appraisal fee.

RL - do you know of anyone using the "clear and conspicuous" statement on new construction allowing revised disclosures ay any point (assuming at least 60 days out from consummation)?


Good Luck!

Back to the original post:
LO/LA tells individual, "We cannot accurately provide an appraisal fee amount without first having your building plans."
That's not a true statement. It's also not a requirement of "application". LO's need to be careful they aren't discouraging someone from applying or, at a minimum, not acknowledging they have an application even without this information.

RL - do you know of anyone using the "clear and conspicuous" statement on new construction allowing revised disclosures ay any point (assuming at least 60 days out from consummation)?

That statement does not go on the construction LE, it would go on the LE that you give for the permanent loan when you are doing two phase financing because you would be delivering that LE 9-12 months before the loan for the permanent phase would close.