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Appraisal Fee for Loan Previously Rescinded

Question: 
We have a borrower who rescinded his loan within the 3 day period and all funds collected were refunded. He has now re-applied and our compliance officer states we cannot charge him for the appraisal since it was the appraisal also completed for the rescinded loan. The new application was made within two weeks of rescission.
Answer: 

Answer by Richard Insley: It's always appropriate to ask for the authority (regulatory or bank policy) for your compliance officer's statement. If you can cite authoritative information (statute, regulation, commentary, case law, etc.) that results in a different conclusion, it's appropriate to ask him/her to reconsider a position.

Answer: 

Answer by Dan Persfull: I am going to offer an opinion that basically supports the compliance officer's position.

You have chosen to re-use an existing appraisal that has been paid for. Due to the consumer's rescission the fee for the appraisal had to be refunded to the consumer under statutory requirements. It's your option to re-use this appraisal obtained in a previous transaction or obtain a new appraisal for the new transaction. If you choose to use the existing appraisal I do not see your authority to re-charge the customer for your use of that appraisal.

You would however be able to require reimbursement for the cost of the appraisal should the consumer ask for a copy of it under their rights to do so in Reg. B.

First published on BankersOnline.com 11/5/12

First published on 11/05/2012

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