Disclosures for Staff Appraiser vs Fee Appraiser

Posted By: FNValue

Disclosures for Staff Appraiser vs Fee Appraiser - 11/02/17 08:40 PM

Has anyone dealt with the proper way to disclose appraisal fees on the LE and closing disclosure when there is a possibility a staff appraiser will complete the appraisal? Not all appraisals are completed by staff appraisers, and we will not know at the time of the LE whether the fee is being paid--to the creditor or to an independent third party. Is it acceptable to move the fee to the appropriate section of the closing disclosure once the creditor is aware of who will retain the fee?
Posted By: rlcarey

Re: Disclosures for Staff Appraiser vs Fee Appraiser - 11/02/17 08:44 PM

There is no guidance.
Posted By: FNValue

Re: Disclosures for Staff Appraiser vs Fee Appraiser - 11/02/17 08:58 PM

I'm seeing the same thing, but was hoping I missed something. We're concerned moving the fee may be viewed as adding a fee to a 0 tolerance section--even though the same fee will be removed from the other section.
Posted By: Dan Persfull

Re: Disclosures for Staff Appraiser vs Fee Appraiser - 11/06/17 02:15 PM

We're concerned moving the fee may be viewed as adding a fee to a 0 tolerance section--

The appraisal fee is already in a zero tolerance section.
Posted By: John Burnett

Re: Disclosures for Staff Appraiser vs Fee Appraiser - 11/06/17 08:13 PM

I think the concern is related to a problem with some vendor systems that treat a cost that's moved from Section B to Section A (or vice versa) as a 100% tolerance violation even if the label for the cost is absolutely identical. I don't believe there should be an violation in such cases.
Posted By: John Burnett

Re: Disclosures for Staff Appraiser vs Fee Appraiser - 11/09/17 08:23 PM

Another issue is whether switching from one to the other can be considered a changed circumstance such that the cost basis can be increased to avoid a tolerance violation. Assuming that a staff appraisal is less expensive than a fee appraisal, under what circumstances would a change in plans to go with a fee appraiser qualify as a changed circumstance?

One might be a situation in which the bank didn't have all the facts on the property type and determines after the initial LE is delivered that the property is actually of a type that the bank doesn't have a qualified or experienced staff appraiser. The addition of information about the property that led to that conclusion could be a changed circumstance. The borrower's decision to change from one type of property to another could be another.

But could there be circumstances under which the bank could not depend on a changed circumstance to permit resetting the cost basis via a revised LE?
Posted By: raitchjay

Re: Disclosures for Staff Appraiser vs Fee Appraiser - 11/22/17 03:09 PM

Not sure we're handling correctly, but here, when we disclose say a $450 appraisal fee and instead end up charging a $100 internal evaluation fee, i simply note the change on our tolerance checklist and do not cure for it (the borrower is saving $350)........nor do we re-issue the LE to show the change. I'm thinking maybe we should be re-issuing the LE?

ETA: And yes, our LOS treats it as a tolerance cure situation. As i said, i simply adjust it to make the cure "go away".....the customer is saving money.
Posted By: Dan Persfull

Re: Disclosures for Staff Appraiser vs Fee Appraiser - 11/22/17 03:45 PM

I'm thinking maybe we should be re-issuing the LE? . . . . . . our LOS treats it as a tolerance cure situation

A decrease in a zero tolerance item fee is not a curable situation. There would be no need to issue a revised LE other than as a courtesy.
Posted By: raitchjay

Re: Disclosures for Staff Appraiser vs Fee Appraiser - 11/22/17 04:25 PM

Dan, the issue with our LOS is that since the fee started in B, then moved to A....so it wants to treat the "new" fee in A the same as if we suddenly wanted to add an origination fee that we forgot....you think we're good the way we're treating it? (I always have, but would be nice to have some agreement.)
Posted By: Dan Persfull

Re: Disclosures for Staff Appraiser vs Fee Appraiser - 11/22/17 04:33 PM

you think we're good the way we're treating it?

As long as you are properly documenting what took place I don't see an issue.
Posted By: raitchjay

Re: Disclosures for Staff Appraiser vs Fee Appraiser - 11/22/17 04:52 PM

Thank you Dan.....