Fee Not Disclosed on LE/Charge Fee From Valid COC?

Posted By: Annie

Fee Not Disclosed on LE/Charge Fee From Valid COC? - 04/12/21 01:34 PM

Assume a lender fails to disclose a zero tolerance fee at initial disclosure, such as an appraisal fee due to human error. The standard appraisal fee is $450. Later, a valid changed circumstance occurs, such as a rush delivery and this adds $200 to the total cost. Is the lender permitted to charge the consumer for the rush fee, in other words, $200 if a revised LE is sent timely?
Posted By: Truffle Royale

Re: Fee Not Disclosed on LE/Charge Fee From Valid COC? - 04/12/21 02:20 PM

What's the valid changed circumstance for the rush delivery fee? Is this something the borrower asked for?
I don't understand what your thread title about the appraisal fee not originally disclosed has to do with your rush fee question.
Please clarify so we can give you the correct answer.
Posted By: Annie

Re: Fee Not Disclosed on LE/Charge Fee From Valid COC? - 04/12/21 02:33 PM

In certain areas these days, buyers are having to pay for an appraisal to be expedited. That is, a typical delivery time may be 6-8 weeks. Depending on the scheduled closing date, this may be insufficient time for the loan to close on schedule. The borrower pays extra to get the appraisal done faster. So, yes this would be a borrower request.
Posted By: John Burnett

Re: Fee Not Disclosed on LE/Charge Fee From Valid COC? - 04/12/21 03:12 PM

I think you have to distinguish the "rush fee" from the "appraisal fee." A lender can't add an appraisal fee to the costs to be borne by the borrower if the lender forgot to include the fee on the initial loan estimate. You cannot fix mistakes like omitting a fee that the lender should know will apply based on industry practice, etc.

So, the bank is stuck with the basic appraisal fee, but I think it could add the "Rush appraisal fee" to the extent that it's an "add-on" to the basic appraisal cost that the bank should have included on the original loan estimate. But it only has three business days from learning of the need for the rush appraisal fee to get the revised loan estimate out.