It's been brought to my attention that the bank ordered an evaluation, prior to providing the initial Loan Estimate to the customer and receiving the intent to proceed back. Unfortunately, this loan has already closed. Am I wrong to think that we need to reimburse the customer the fee that was charged for the evaluation since this loan is out of compliance?

What is out of compliance? You can't charge them for a service outside of the credit report prior to receiving an intent to proceed. That has nothing to do with ordering the service as long as you are prepared to get stuck with the cost if an intent to proceed is not received.

So if we ordered, received and provided the borrower with a copy of the evaluation prior to providing disclosures and getting the intent to proceed back, then we do not need to eat that fee?

Depends when you charged the customer the fee for the service.

From Randy's above post:

You can't charge them for a service outside of the credit report prior to receiving an intent to proceed.

That is a tell tail sign that there is prescreening going on in your bank. If the property value does not come back at what they thought - are they telling the people not to bother applying??

No, this was a situation of a loan renewal that staff did not stay on top of and the assistant jumped the gun without thinking about our process.