Re: LO paying for credit report or appraisal

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I have to admit that I didn’t see this question coming. I’ve never ran across this issue before, so maybe Jack can give us his insight on the topic.

Right off the top of my head, I can’t think of anything that would explicitly prevent them from doing this, thought I think it is somewhat odd. Typically in this situation, the financial institution or the applicant would pay for the extra fee, not a third-party. You mentioned your Mortgage department so I’m going to assume that you are dealing with a consumer real estate loan. You’ll need to be sure to properly disclose how that fee was paid on your HUD. I’m would think you would use POC but I’m not sure what letter you would use to indicate it was paid by a third party. Typically, you would use B for borrower, S for seller, and L for lender.

Probably not so much in this instance with the credit report, but when this is occurring with your appraisals, be cautious about how this could potentially impact Section 8 with kick-backs. I’m not saying that it would necessarily be a kick-back (section 8 violation), but that you should be very mindful of that topic, especially in these cases.

Lets see if Jack has any additional input…