We are looking at using a third party to assist us in our appraisal function. The 3rd party charges a 4% fee on all appraisals
ordered. We manage the function as the 3rd party is not an AMC. We use their software to track appraisals and maintain an appraisal list, etc. Below is what an FDIC person said about the 3rd party fee as NOT being a finance charge. Is this correct?

Ms. G----- indicated that she consulted with her colleagues regarding the consumer disclosure aspects. Their interpretation is the transaction fee incurred as part of ordering the appraisal is not a finance charge, but instead part of the appraisal fee, and could be included with the appraisal fee. There are three lines for appraisal related fees on the LE. To be transparent, you could instead indicate the appraisal service fee as an individual line item separate from the rate charged by the appraiser. Ms. G----- indicated that while this is their interpretation as FDIC examiners, the ultimate authority over TRID is the CFPD.

This question remains unanswered from another forum and maybe better stated than above:

Hi All - I have a question that seems like it should be pretty simple to answer, but I have been unable to find it directly addressed.
Reg Z (1026.4(c)(7)) clearly states that appraisal fees are excluded from the finance charge calculation. Does this exclusion also apply to the separate appraisal management company fees (fees paid to a third party for managing the appraisal process and engaging an appraiser) ?

Let's try another approach, I think we can all agree that an Appraisal Review Fee is not a FC as provided in 1026.4 (c)(7).

The question is regarding an Appraisal Service Fee charged by a 3rd party and passed to the consumer in a TRID covered loan a
FC? This fee would not be charged in a cash transaction. The 3rd party is for the convenience and expedited use of the lender.

IMHO its a finance charge. Our appraiser consultant that works with the 3rd party claims its not a FC with help from a regulator
of course who puts the disclaimer that its subject to the CFPD(B).

If the service for the fee does not include a review function, then I agree with you, it would be a FC.

It does not include a review. The fee is a flat 4% of the appraisal fee paid to the third party software provider.

An appraisal review is done in-house. Thanks rl.