If a loan is originated before an appraisal is engaged, can an estimated fee for that appraisal still be excluded from Finance Charge for a Real Estate transaction? I know the requirement is that it be “bona fide and reasonable.” Can that still be argued if $ is a (low) estimate based on market and charged in advance of work?
We have a bridge loan for which we are encountering appraiser shortage. Management is considering proceeding and getting appraisal done as promptly as possible after; similar to what was included in earlier COVID phase accommodations.
You have potential problems with both the TRID rules and the appraisal guidelines. The TRID problem with both the LE and CD is that the forms list closing costs, which are costs paid at or before closing. Your fee is to paid after closing. You may want to list the charge on an addendum to the disclosure, similar to what the reg. requires on inspection and handing fees paid after closing.
The appraisal guidelines generally require an appraisal to be conducted before the transaction is complete. Evan though tha Pandemic continues to rage across the nation, the temporary relief provisions have expired. That said you have to do what is necessary for the borrower. I suggest adding a memo explaining your estimate of the property value and the circumstances that make it impossible to get an appraisal in a timely manner.