RESPA states in 1024.7(4):
(4) The lender is not permitted to charge, as a condition for providing a GFE, any fee for an appraisal, inspection, or other similar settlement service. The lender may, at its option, charge a fee limited to the cost of a credit report. The lender may not charge additional fees until after the applicant has received the GFE and indicated an intention to proceed with the loan covered by that GFE. If the GFE is mailed to the applicant, the applicant is considered to have received the GFE 3 calendar days after it is mailed, not including Sundays and the legal public holidays specified in 5 U.S.C. 6103(a).
There are no documentation standards for a Notice of Intent to Proceed or model form provided by RESPA to my knowledge. Our institution does provide an Intent to Proceed letter with initial disclosures to document compliance with REPSA. This document is retained according to other RESPA document retention requirements for good measure.
The question is,
Can appraisal fees be collected prior to initial disclosures being returned by the borrower (with the signed ITP letter) as long as the GFE has been considered or demonstrated received by the borrower? Is it reasonable to consider payment for appraisal fees the borrowers "indication" of intent to proceed with the loan transaction?
After all, what borrower would pay a 400+ dollar appraisal fee if they did not intend to proceed?
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