Borrowers requested $100,000 dollars loan - They recently started the floor repairs and because of the floors needed to be repaired, the appraisal came back low. Bank approved $100,000 but with a condition that they hold back $5,000 of the loan proceeds (putting the money in an escrow account) until the borrowers complete the floor repairs and order another appraisal. Once the appraisal comes back with a higher value, they will get the rest of the loan proceeds ($5,000) after closing.
Would you consider the $5,000 as a fee? If so, where would you disclose on LE and CD? If we did not disclose as a fee on the original LE, would you have done a revised LE within 3 days of the change?
Or do you consider the $5,000 as a deposit since it is coming out of the loan proceeds? If so, would you do a revised LE to show the $5,000 as the deposit if we did not disclose on the original LE?
Thanks!