Which fee can be collected prior to delivery of a Loan Estimate and Closing Disclosure?

A credit report fee can be collected prior to the delivery of a Loan Estimate and Closing Disclosure because it is considered a third-party fee that can be incurred in the initial stages of the loan process. Mortgage lenders are allowed to charge for a credit report as soon as the borrower applies for the loan, which can occur before the Loan Estimate is officially provided. This is essential for the lender to assess the creditworthiness of the applicant.

In contrast, the processing fee, underwriting fee, and appraisal fee are typically considered to be part of the closing costs that are disclosed in the Loan Estimate. These fees are generally not allowed to be collected prior to the delivery of the Loan Estimate as they can vary based on the specifics of the loan and the disclosures provided to the borrower. Thus, collecting these fees upfront would not align with the regulatory requirements set forth by the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA) regarding transparency and disclosure of costs associated with obtaining a mortgage.