An applicant came to us for a mortgage loan and we issued our LE and disclosed a figure for the appraisal. We are now at CD, Along the way, the customer informed us that he also applied for the mortgage at another bank before deciding to go with us. The other bank ordered and obtained the appraisal and the customer paid for it as part of their application with the other bank. We have had the appraisal signed over to us by the appraiser since it was so recent.

As to the appraisal fee, should we remove it from Section B and show it in the "Other" section of the CD in the "Paid before closing" column? It is still a cost of THE loan, just not a cost of our bank's transaction. That is my thought. In addition, the actual cost of the appraisal was higher than what we disclosed on our LE. But, since we are moving it to "Other", do we need to worry about the cost exceeding our initial estimate? If we do, then we can show a general lender credit for the difference?

Thank you!

This is no different than putting a survey fee on the LE and finding out later that there is an acceptable survey available. The charge is not a fee that they are paying to close this loan.

"We have had the appraisal signed over to us by the appraiser since it was so recent."

I hope you mean that the lender that ordered the appraisal assigned the appraisal to you. An appraiser cannot re-assign an appraisal, or they have violated USPAP rules.

So, based on your first paragraph - should we leave it off entirely?

Yes, I misspoke, the other bank did assign it to us.

From the CD - that is correct. They paid for it for the other loan application, not yours.

Thank you!

One last questions . . . now that we've received the appraisal from the other bank (signed over to us), we must now give a copy to our borrower, correct? We will be using it in connection with our loan transaction. Would the assignment documents be provided as well? Thank you!

You should give them a copy of the appraisal. You really have no idea that they have received a copy previously, and it is the appraisal that you are relying on for this transaction. There is no reason to provide them a copy of the assignment documentation.

Thank you for the help!