New Loan Estimate w/ Rate Extension Fee

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Question:

Our borrower's appraisal came in lower than expected. The borrower would like to pay for a rate extension and order a new appraisal in a couple of months hoping for an increase based on sales that will take place in the near future. Can we issue a new Loan Estimate with the rate extension fee, and another appraisal fee, or should we turn down this loan and start over?

Answer:

What you should do is really a business decision to make. IMHO - You have made your decision and most likely counter-offered a lower loan amount. If the borrower wants to wait for real estate prices to escalate, I suggest you let them do it on their own and not involve yourself in that delay and have them come back when they think it is a better time.