A Georgia broker collects $75 for a credit report and $300 for its own processing before settlement. If the credit-report charge is remitted to the third-party provider, which amount is an application fee under the state definition?
Correct Answer
D) Only the $300 is an application fee; third-party remittances are not
An application fee is any fee advanced before settlement to the broker or lender in connection with an application, including charges for soliciting, processing, placing or negotiating, and the term does not include payments to be remitted to third party providers such as appraisal or credit report fees. Other choices: treating both as application fees ignores the carve-out; being advanced before closing is what makes a fee advanced rather than an application fee; and the $75 is the one that is remitted onward. Source: Ga. Comp. R. & Regs. 80-11-1-.01(4)(c)
Why This Is the Correct Answer
An application fee is any fee advanced before settlement to the broker or lender in connection with an application, including charges for soliciting, processing, placing or negotiating, and the term does not include payments to be remitted to third party providers such as appraisal or credit report fees. Other choices: treating both as application fees ignores the carve-out; being advanced before closing is what makes a fee advanced rather than an application fee; and the $75 is the one that is remitted onward. Source: Ga. Comp. R. & Regs. 80-11-1-.01(4)(c)
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