We provide our customers with a GFE on construction because we always anticipate getting permanent financing; however, there has been inconsistencies in the way the construction inspection fees are being disclosed on the GFE. We typically anticipate 4-6 inspections will need to be completed during the average construction process.
Some of our loan officers complete the inspections themselves, while others send an appraiser out to complete the inspections. If a loan officer handles the inspection themselves, the initial appraisal and final inspection will be handled by an appraiser and we charge the customer; therefore, we are disclosing these fees to the customer.
However, for those loan officers that engage the appraiser to go out and complete the inspections we are still only disclosing the initial appraisal and final inspection. Each inspection is charged to the customer from the draw off of the construction line that is being requested after the inspection has occurred. Shouldn’t these inspection fees also be included on the GFE?
While it is not a settlement service necessarily and the service is occurring after settlement, it is still a known fee that will be charged to the customer that the bank is aware of. Some lenders feel that it is a cost to build the house, such as the cost of a box of nails…
Also, if some lenders are using appraisers and some are not for inspections then technically the cost of the loan is different based on the loan officer…UDAAP???