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#2209596 - 03/26/19 08:08 PM accidently collected appraisal fee before ITP
river girl Offline
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Joined: Nov 2004
Posts: 1,005
A one off where we collected the appraisal fee before receiving Intent to Proceed.

Do we cure? Do we eat the cost of the appraisal or do we notate, train and move on?

I couldn't find any guidance.

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#2209615 - 03/26/19 09:29 PM Re: accidently collected appraisal fee before ITP river girl
MScarn6942 Offline
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Joined: Aug 2015
Posts: 756
Land Lacking in Lakes, IL
Did the loan close? If yes, no you don't eat it but you do notate and train. If it didn't close, you eat the fee.
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#2209713 - 03/27/19 07:08 PM Re: accidently collected appraisal fee before ITP river girl
river girl Offline
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Joined: Nov 2004
Posts: 1,005
It closed. So just a teachable moment and opportunity to strengthen controls but no cure to the consumer.
Thank you

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#2209777 - 03/28/19 03:13 PM Re: accidently collected appraisal fee before ITP river girl
RVFlyboy Offline
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RVFlyboy
Joined: Oct 2000
Posts: 5,978
Soaring over Georgia
There is some potential legal risk overhang with this. It is technically a violation that cannot be corrected (unless you've got a time machine). As such, it could be raised as a defense, should the borrower default and you begin foreclosure proceedings. Just something to be aware of.
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#2269605 - 04/25/22 08:13 PM Re: accidently collected appraisal fee before ITP river girl
OldSchoolBanker Offline
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Joined: May 2005
Posts: 660
FL
Tacking onto this thread. We have been asked by a correspondent lender to consider funding a loan where the Originator accidentally collected the appraisal fee prior to the Intent to Proceed. The loan is approaching funding and they are concerned about sale ability in the secondary market (as well they should be).

Any further thoughts on this from experts on if this is a fatal flaw that can be a legit defense in foreclosure?

Thanks
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#2269617 - 04/25/22 11:00 PM Re: accidently collected appraisal fee before ITP river girl
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 79,235
Galveston, TX
A defense in a foreclosure - I think not. However, it is a fatal flaw from a potential civil liability standpoint. If the investor figures it out - it is coming back 100% guarantied.
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