Community banks often lend out of their typical marketing area due to the solid relationships developed with their customers. If a long time customer of the bank wants to purchase a vacation or second home in Wisconsin or in Florida they naturally come to their hometown banker.
But what happens when an appraisal fee of $450, which was disclosed on the initial loan estimate, is revised to $800. The appraiser discovered that the home was on a waterfront, and was much larger than the other homes, making it atypical for the area. Can the bank consider this a valid changed circumstance and re-disclose within three days and pass along the increase to the customer?
Well, the answer is, it depends. If the customer didn’t disclose this information, and the appraiser had no way of knowing prior to bidding the project it can be considered a valid changed circumstance. But, if the lender who took the application was aware of the home's characteristics and didn’t notify the person ordering the appraisal of these characteristics (waterfront, etc.), then it would not be a valid charge to the customer. As always, communication is huge is our business!