We have a loan in process where originally there were to be 2 residential properties taken as collateral. The GFE was issued disclosing 2 appraisal fees, 2 flood certification fees, and 2 title fees. Both flood certifications were completed and work completed on both titles. Before the appraisals were completed, the one property was sold and will no longer be held as collateral. The bank will still make the loan but at a higher LTV. The bank was able to cancel the one appraisal.
Since the bank has already paid for the flood cert. and title work and it was disclosed on the GFE, can we still charge the customer for both since the property it is for is no longer a part of the loan? The services were rendered in good faith and we are not trying to upcharge the customer but are trying to recoup some of the fees it cost the bank.
This is a unique situation and I don’t believe you’ll find anything in writing that discusses how to handle it, but in my opinion, if both properties were offered as collateral, you began the process based on that and then the property was sold/revoked as collateral, I don’t see a problem with charging the customer the fees that were incurred as a result of that property being pledged. As you know, the file should be documented to reflect the circumstances and why those fees were charged.