[TheBank]

We have a secondary market mortgage department within our bank. If a loan application to the mortgage department cannot be originated, the loan may be originated by the bank and retained, not sold. In these cases, if the mortgage department ordered the appraisal, and the appraisal company does not reassigned the invoice to the bank, if the customer pays that to the mortgage department prior to our loan origination, are we required to show that on our CD as paid before closing? What if the borrower pays it at the time of loan origination, to the mortgage department? What if the appraisal company agrees to reassign the invoice to the bank?

[kmeade]

Following

[Brent V]

Could you clarify if the secondary market mortgage department is simply another department within your bank or a separate legal entity? If it is another department within your bank then the loan was originated by the bank, the appraisal invoice was sent to the bank, and the customer made payment to the bank. It should be shown on your CD as paid before closing. If the mortgage department is another legal entity then that is another ball of wax.

[TheBank]

The mortgage department is a division of our bank, so yes, I would say it is within the bank. The mortgage department is not a separate legal entity.

[Brent V]

Then regardless of where the invoice or payment was sent, it all falls within the bank. It should be shown on the closing disclosure as paid before closing.

[Author]

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