A Washington borrower has received the Loan Estimate and indicated an intent to proceed. The broker then collects $600 for an appraisal and credit report before ordering either service. May the broker collect these third-party fees in advance, subject to trust and refund duties?
Correct Answer
C) Permitted: third-party fees may be solicited or received in advance
Washington permits advance third-party fees subject to trust and refund duties. Federal Regulation Z generally bars fees other than a reasonable credit-report fee until the Loan Estimate is received and the borrower indicates intent to proceed. Those prerequisites are met here; approval or direct payment to providers is not required. Source: RCW 19.146.070(2)(b); 12 CFR 1026.19(e)(2)(i)
Why This Is the Correct Answer
Washington permits advance third-party fees subject to trust and refund duties. Federal Regulation Z generally bars fees other than a reasonable credit-report fee until the Loan Estimate is received and the borrower indicates intent to proceed. Those prerequisites are met here; approval or direct payment to providers is not required. Source: RCW 19.146.070(2)(b); 12 CFR 1026.19(e)(2)(i)
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