Posted on: 20th Dec, 2010 10:54 am
When inquiring for refinancing my mortgage, Loan Officer took upon himself to order appraisal of my house, although I did not sign any loan application papers. He did inform me over the phone that he was ordering the appraisal and I agreed. The house price came back too low and thus I did not go ahead with the loan application. The bank charged me the appraisal. Can I claim refund of this fee. Again, no loan application papers were signed by me and importatnly no signed form to authorize the appraisal.
Hi Guest!
Welcome to forums!
Though no loan application was filed, the property was appraised by the lender. In such a situation, the lender can charge you appraisal fees. You can ask for the refund but I believe it will depend upon the lender whether or not he will give back the fees.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
Though no loan application was filed, the property was appraised by the lender. In such a situation, the lender can charge you appraisal fees. You can ask for the refund but I believe it will depend upon the lender whether or not he will give back the fees.
Feel free to ask if you've further queries.
Sussane
The fees paid for the appraisal are in exchange for the services provided by the appraiser, meaning that when the appraiser develops an opinion of value, the fees are due to the appraiser and they are non-refundable (rare exceptions may apply). Now in this situation, the lender ordered the appraisal and they are bound by law to make sure the appraiser is paid for the services provided. Any refund will be strictly between you and the lender, not the appraiser. They must get paid regardless of which pocket it comes from. This is why many lenders require you to pay them upfront for these costs, so they are not paying for hundreds of appraisals out of their own pockets for loans that do not close.
thanks to both for your answers.
answer from benjamin is somewhat irrelevant because the issue was not whether or not the appraiser was paid. the lender paid upfront for the appraisal, then charged me for that more than a month later, although i did not sign a loan application (in which the terms of paying the appraisal are included) and therefore decided not to refinance. thus, in my situation the loan officer took it upon himself to order the appraisal as a risky business decision, without my written and signed approval.
i had some quick legal advice indicating to me that i can demand the refund because i did not order it, and i do not need the appraisal report.
although i tacitly aggreed with the lender to go ahead with the appraisal, is it common practice for lenders to do that before any loan application papers are signed? i feel that i was somewhat coerced.
it was really disappointing because the house price came back $1k too short of below 125% loan-to-value to get a good rate. that is why i did not go ahead with refinancing.
anyway, thank you again both for your input, and i will craft an email to hopfully get some money back from the lender.
answer from benjamin is somewhat irrelevant because the issue was not whether or not the appraiser was paid. the lender paid upfront for the appraisal, then charged me for that more than a month later, although i did not sign a loan application (in which the terms of paying the appraisal are included) and therefore decided not to refinance. thus, in my situation the loan officer took it upon himself to order the appraisal as a risky business decision, without my written and signed approval.
i had some quick legal advice indicating to me that i can demand the refund because i did not order it, and i do not need the appraisal report.
although i tacitly aggreed with the lender to go ahead with the appraisal, is it common practice for lenders to do that before any loan application papers are signed? i feel that i was somewhat coerced.
it was really disappointing because the house price came back $1k too short of below 125% loan-to-value to get a good rate. that is why i did not go ahead with refinancing.
anyway, thank you again both for your input, and i will craft an email to hopfully get some money back from the lender.
Did you pay the lender for the appraisal?
You indicated they paid and billed you for it, but, not sure if you ever paid them.
To the best of my knowledge, no lender may collect any money from you until they have issued you a Good Faith Estimate. If they never issued a Good Faith Estimate to you, they can not collect any money from you.
The fine for doijng so is much greater than giving you the refund (if you paid them)
You indicated they paid and billed you for it, but, not sure if you ever paid them.
To the best of my knowledge, no lender may collect any money from you until they have issued you a Good Faith Estimate. If they never issued a Good Faith Estimate to you, they can not collect any money from you.
The fine for doijng so is much greater than giving you the refund (if you paid them)
Thank you John for your input. The loan officer wrote down my credit card information before ordering the appraisal. Thus, he used that information to bill me later on. He did provide me with a good faith estimate before ordering the appraisal.
Your last sentence is not clear to me: "The fine for doijng so is much greater than giving you the refund (if you paid them)": if you get the chance can you explain? Thanks.
Your last sentence is not clear to me: "The fine for doijng so is much greater than giving you the refund (if you paid them)": if you get the chance can you explain? Thanks.
If you received a Good Faith Estimate you either signed it and gave back to the loan officer or you had the Good Faith Estimate and then the appraisal was ordered?
If you had the Good Faith Estimate, the lender can then collect fees as they were disclosed to you before the fees were charged.
The lender did what they were supposed to do if they issued the GFE before they billed and collected from you.
The lender had no idea, nor did you, that the appraisal would be too low to do what you wanted to do.
You are not do a refund
If you had the Good Faith Estimate, the lender can then collect fees as they were disclosed to you before the fees were charged.
The lender did what they were supposed to do if they issued the GFE before they billed and collected from you.
The lender had no idea, nor did you, that the appraisal would be too low to do what you wanted to do.
You are not do a refund
John, to make it clear to you: I did not sign any paper. You are a loan officer, thus of course you will say I am not due a refund. I totally disagree with you.
The lender made the mistake to go ahead in ordering the appraisal without making sure that I signed any paper indicating that I made a knowledgeable decision to go ahead with it. I did not order the appraisal, the lender did. There is no document indicating that I agreed in anything of what this lender did. I did not sign anything.
The lender applied a tremendous amount of pressure, apparent urgency, coercion, whatever you want to call it, to let me agree that he should go ahead and order the appraisal. The bottom line is that I did not sign a loan application, I did not sign his GFE, and I DID NOT ORDER the appraisal.
John, would you have ordered an appraisal in my situation, i.e., without me providing any signed agreement whatsoever?
My observation on this industry is that it is designed to disadvantage the borrower at every step. The borrower is asked to make a decision on the most important loan of his/her life without any clear knowledge of the numbers: rate, fees, PMI, insurance, house value, etc, and thus the final mortgage amount comes as a total surprise at the time of settlement. In addition, if there are any risks to be taken it is always on the borrower shoulder, like in my example for the price of the appraisal.
The lender made the mistake to go ahead in ordering the appraisal without making sure that I signed any paper indicating that I made a knowledgeable decision to go ahead with it. I did not order the appraisal, the lender did. There is no document indicating that I agreed in anything of what this lender did. I did not sign anything.
The lender applied a tremendous amount of pressure, apparent urgency, coercion, whatever you want to call it, to let me agree that he should go ahead and order the appraisal. The bottom line is that I did not sign a loan application, I did not sign his GFE, and I DID NOT ORDER the appraisal.
John, would you have ordered an appraisal in my situation, i.e., without me providing any signed agreement whatsoever?
My observation on this industry is that it is designed to disadvantage the borrower at every step. The borrower is asked to make a decision on the most important loan of his/her life without any clear knowledge of the numbers: rate, fees, PMI, insurance, house value, etc, and thus the final mortgage amount comes as a total surprise at the time of settlement. In addition, if there are any risks to be taken it is always on the borrower shoulder, like in my example for the price of the appraisal.
You are mistaken. I do not say you are due no refund because I am a loan officer. I say so because I know the regulations.
You do not have to sign anyhting for a lender to be authorized to collect fees. You have to have the Good Faith Estimate before you can be charged anything. I did not write you have to sign the Good Faith Estimate. I worte you have to have it.
You said you have it.
On top of that, you gave them your credit card number so you could be charged.
Good luck trying to get your refund.
You do not have to sign anyhting for a lender to be authorized to collect fees. You have to have the Good Faith Estimate before you can be charged anything. I did not write you have to sign the Good Faith Estimate. I worte you have to have it.
You said you have it.
On top of that, you gave them your credit card number so you could be charged.
Good luck trying to get your refund.
Thanks again John for your reply. I appreciate your time and I still totally disagree with your conclusion, despite your knowledge of the regulations.
By the way you did not answer my question: would you have ordered the appraisal without any signed agreement (e.g., loan application) provided by the borrower?
You have to answer this because you list you reference in that forum, and based on your answer other readers will decide if you are someone they can trust.
Well, I guess, I just choose the wrong forum for advice, because here Loan Officers like you, with obvious conflict of interest, will deny any wrong doing of others in the industry. A lawyer-based forum will be more appropriate.
By the way you did not answer my question: would you have ordered the appraisal without any signed agreement (e.g., loan application) provided by the borrower?
You have to answer this because you list you reference in that forum, and based on your answer other readers will decide if you are someone they can trust.
Well, I guess, I just choose the wrong forum for advice, because here Loan Officers like you, with obvious conflict of interest, will deny any wrong doing of others in the industry. A lawyer-based forum will be more appropriate.
Initially, I suggested to you they should refund because the fine was greater if they did not do what they are supposed to do. So, I guess I was not sticking up for fellow loan officers.
Then you told me they had issued the Good Faith Estimate. At that time, I did not tell you what the fine was for violating the Truth-in-Lending Regulation Z requirement that a Good Faith Estimate be issued before collecting any fees because they issued the Good Faith Estimate as required.
Your derogatory comments about my professionalism and knowledge to answer questions here do not bother me. You are just angry because you paid a fee.
Then you told me they had issued the Good Faith Estimate. At that time, I did not tell you what the fine was for violating the Truth-in-Lending Regulation Z requirement that a Good Faith Estimate be issued before collecting any fees because they issued the Good Faith Estimate as required.
Your derogatory comments about my professionalism and knowledge to answer questions here do not bother me. You are just angry because you paid a fee.
Questions for you all related to this, what if they provided a good faith estimate, ordered the appraisal and then they changed the good faith appraisal on me despite the appraisal coming back within an acceptable range and tried to get me to commit to the loan? Do I have any recorse there?
If you feel that something of that sort has happened, then you can simply contact an attorney in order to find out what legal steps you can take.
forget regulations... how about right and wrong... you called them for a loan... surely you understood that your house would need to be appraised... when the broker told you this you gave him your credit card number to pay for the appraiser to come out and appraise your home... what do you think the appraiser should work for free ? he dont have a wife and kids to feed and clothe? Why do you think the bank should pay for this? you called them for the loan... you were in no way duped or mislead. Your point of you never signed a loan application is merely your excuse for not wanting to pay the appraiser for his services ... that you wanted so you can get your loan... the only 2 problems that i see with this entire situation is that you want to be a deadbeat on paying the appraiser for his time and services and that a bank would even consider offering you a loan for 125% of the value of your collateral
Why should the loan officer pay if YOUR house didn't appraise? How can you be so ignorant? Be a responsible person.
Yes, it is not the fault of the loan officer or the appraiser if your property doesn't appraise. The market is such that a large number of people have lost equity in their properties.