Appraisal and Third party fees

Please note the policy clarification below:

Conventional, FHA, Reverse Mortgages, Commercial Loans, and HELOCS:

Third Party Fees (appraisal, survey, home inspection, termite, credit report, etc.) are NOT to be payable to Innovative Mortgage under any circumstances. If you collect a Third Party Fee Innovative is required to refund the amount in full to the borrower(s). Innovative does not maintain a Third Party Account, therefore, Third Party Fees must be directly payable to the applicable Third Party by the borrower(s). Additionally, please note that Third Party Fees must be mailed or delivered directly by the borrower. Under NO CIRCUMSTANCES are Loan Originators to deliver Third Party Fees to a vendor. Furthermore, all Third Parties must be paid in advance of completing their service. A loan originator may pay for a Third Party Fee on behalf of the borrower, but must do so in advance of the service (in other words if you want to pay for your borrower you must do it up front). Otherwise, the borrower must pay in advance of the service. A Third Party Vendor may proceed at their own discretion without advance payment if, and only if, they sign the ‘Vendor Release of Liability’ form. Otherwise, the Loan Originator will be held responsible for paying the Third Party Fee in its entirety. This form can be found @ www.TheMortgageIsRight.com/disclosures

VA LOANS:

‘Application Fees’ may NOT be collected on any loans, except VA loans. If you collect an Application Fee on a VA loan, it must be payable to ‘Innovative Mortgage Services, Inc.’ and must be immediately remitted to our corporate office. Since VA does not permit the borrower to pay for the appraisal directly, the Loan Originator must make payment to the VA appraiser in advance of the service, or Innovative will cut a check to the appraiser if an Application Fee was collected. This policy applies ONLY to VA LOANS.

FHA Policy Notification

THIS CAN EFFECT YOUR PAY- PLEASE READ

Dear Loan Associates,

We have recently been made aware of a FHA policy regarding fees collected at closing by mortgage brokers. Mortgage brokers can only charge an origination fee (capped at 1%) OR ancillary fees (capped by the wholesale mortgage lender) to a borrower. The ancillary fees are defined as any fees payable to the mortgage broker (Innovative Mortgage). You cannot charge your borrower an origination fee and any additional fees (broker, admin, ect). If you elect to charge your borrower a broker fee, you cannot charge an origination fee. You CAN charge your borrower an origination and the SELLER any additional mortgage broker fees. FHA has indicated that the payment by the BORROWER of both an origination and mortgage broker fee is “double dipping”. All processing fees must be paid DIRECTLY to the processing companies as FHA has indicated that they consider this an “ancillary fee” and should be covered in broker fees. If you have any questions, please contact me directly. Please note that this ONLY applies to FHA mortgages. Failure to follow this policy will result in funds refunded to the borrower. Thank you.