[shea930]

I’ve been reading different posts on this all day trying to determine the correct way to disclose construction inspections on the LE and CD. However I haven’t come across any post where they’ve handled them exactly like us so I want to make sure I’m on the right path. We currently collect inspection fees at the time the inspections are done after closing, but with our LOS system we can’t figure them in our APR unless we show them as actual fees….so before TRID we would list them as fees paid in cash (POC). Are we okay still doing this? The only concern I have is the fact that now the CD doesn’t have the terminology of POC….it wants to show the inspection fees borrower paid – before closing? I have a feeling this might be a problem but wanted to see what opinions were out there. If we can’t do it this way I guess our only other option is to start collecting the fees at closing and holding in a GL? I was really hoping to avoid this way if possible.

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[Mary Frances]

Shea930 — We had the same issue and our first TRID application happened to be a construction loan. We did show the inspection fees on the LE and CD because that is the only way to get the fee in the APR. On the CD it shows in the cash to close but we didn’t collect the funds for the inspection. We had the borrower write a check for the cash to close minus the inspection fees. That may not be correct but the other banks we reached out to didn’t collect the inspection fees the way we do so that was our only option. We have since decided to collect a flat fee at closing for inspections. And we base the fee on a tiered loan amount (i.e. 0 – 100,000 loan amount inspection fee of $300.00 and 100,001 – 500,000 loan amount inspection fee of 500.00 etc…) We have in house appraisers so we won’t have to hold the money in a GL account that will be debited later to pay for the inspection.
Hope this helps.

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