Mortgage Grapevine

Do you add a fee to appraiser's invoice

Assuming you select appraiser and order the appraisal?

Obviously AMCs effective do this and Freeman v. Quicken would seem to give a green light. There is costs to “doing it yourself” and I think a nominal “add on” would be more than justified. A deduction from appraiser's charge would be more risky (split)

Other alternative would be to increase flat fee for all loans but I’m weary of the requirement for a zero-zero option which still appears to be in the final 2014 rules. Still working on that one – not looking at an interest rate range for the BU/BD but backwards from a dollar amount. Seems you could get screwed by just adding flat fee divided by loan amount if you ventured into another interest rate range. Anyone done preliminary work on this?

by c-f-s February 20, 2013 1:12 PM


When I was working for ITT Financial Services a couple life times ago. They didn't charge extra for the appraisal, and they were the greediest bastards on the planet.

More important than any court decision is how your end investor treats it.


by YATI February 20, 2013 2:58 PM




Investor? Are you talking of FNMA? Seems they'd have to go along with the law as written.
by c-f-s February 20, 2013 3:12 PM




Investor? Are you talking of FNMA? Seems they'd have to go along with the law as written.
by c-f-s February 20, 2013 3:12 PM


I suspect that most lenders and regulators would consider an actual mark-up of a third-party charge by the loan originator to be inappropriate. The originator is not in the business of appraising or appraisal management, and generally adds nothing to the appraisal process other than ordering and receiving the appraisal. Administrative costs associated with loan processing, including ordering an appraisal, ordering a credit report, updating the file, verifying findings, telephone calls, office overhead, etc. should generally be covered by the origination fee or an administrative fee, but not added to the cost of individual third party services.

Also, RESPA requires that the name of the payee be shown on the HUD-1 for the appraisal and most other charges. If the originator marks up that charge then they will have to show two separate amounts - the actual payment to XYZ AMC and the markup to ABC Loan Company. However, since the markup is going to the loan company it must appear in the total at line 801 of the HUD-1, not the appraisal line (line 804).

But perhaps I have misunderstood your proposal. A separate appraisal handling or administration fee (flat fee or percentage) to be paid to the originator would generally not be a problem (if not restricted or prohibited by state law) if property disclosed.
by oldbe February 20, 2013 3:34 PM


You can't.
And you're a nickel/dime artist for considering.
Make it.work within the system.

Intolerable question.
by turdly February 20, 2013 4:19 PM


Additional information related to my last post:

A separate appraisal handling or administration fee (flat fee or percentage) to be paid to the originator would generally not be a problem (if not restricted or prohibited by state law) if property disclosed. This means the addional appraisal admin fee charged by the originator would be included in the total in Block 1 of the GFE and line 801 of the HUD-1 and included in the TILA finance charge calculations. Which begs the question of why charge a separate appraisal admin fee. Just increase the origination fee or the general admin fee...

by oldbe February 20, 2013 5:36 PM


c-f-s,

I think you will find most loan originators do not sell directly to Fannie or Freddie.

The end investors do, and I guarantee you they are very concerned with the items that Oldbe laid out so much better than I ever could.
by YATI February 20, 2013 6:15 PM


just brown bag your lunch ....
by LOANMAN February 20, 2013 8:05 PM


illegal in Califonria to add on to apprasal fee. Also in my opinion under Section 8(b) of RESPA. There is a difference between doing it and not getting caught and doint it and gettig caught. Especially if the catcher is the FTC or HUD
by thorlaw February 24, 2013 4:25 AM


Reply

Username:
Password:
(No password? Register here)
Message:
(Don't be a nuisance.  Please avoid offensive language.  Advertisements are not allowed.)


Twitter
Facebook
LinkedIn
Already a subscriber? Log in here
Please note you must now log in with your email address and password.