Hi, I am new to the Compliance side of the business and have run into an issue that we are trying to get others opinions on.
Short Story - we had a loan that we had to extend the rate lock numerous times due to issues with the property (property was in probate), we passed the fees to the borrower as our Normal SOP. The parties added to the sales contract that the seller would pay these extension fees. The sales contract was amended multiple times, changing the seller paid credits. Only the initial addendum states that the credit is for extension fees (500), by the last addendum, the seller credit had increased to 2,000. During a compliance review, it was found that the loan did not close with the initial investor and the extension fees were no longer payable. (We do not have extension fees on our end and it is a pass through fee). The CD showed that the borrower paid a portion of the extension fees and the seller paid a portion. We all agree that these fees must be refunded. The issue that we have is Who gets the refund? Compliance is saying the Borrower because the last 3 addendums does not specify what fees that seller is paying and the borrower gets the amount. Mortgage department is saying that the fee should be split to how it was paid on the CD, the portion the borrower paid goes back to the borrower and the seller gets the amount back to them.
What is the collective opinion on this?