Bank orders appraisal - before loan approval.

Asked by Van, Stirrup Creek, Durham, NC Tue Oct 27, 2009

I have applied for a FHA mortgage loan with Wells Fargo. The loan officer made me sign all sort of papers, then charge my account for an appraisal 520.- before approving my application for an FHA loan . The purchase price was 130.000- and the appraisal value was 145.000-, but the bank turned down my application on the basis of my insufficient income.
Is it normal they have ordered the appraisal before approving my loan, and make me incur such expense?
Where should I complain about this?
Thank you

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Roberta LaRo…, , Las Vegas, NV
Tue Oct 27, 2009
Hi Van,

Not knowing what you agreed to with those "all sorts of papers" you signed, makes it impossible for anyone not familiar with the details to say what was right or wrong.

In my own experiences with the loan officers I've worked with, buyers will pay for the appraisals, but loans are typically approved before an appraisal, and fees usually less than what you've quoted here. It can be possible that a buyer's circumstances could arise before closing that could prevent a loan from being funded. Taking out a car loan or other credit purchases, or banking account discrepancies would be some examples. It's the same as a property not appraising for loan value, and that will cancel a deal and the buyer still responsible to pay appraisal fees. Those are often contingencies found in your contracts.

Again, that doesn't mean this is what applies in your specific situation. It only shows a good reason why you should always have a clear understanding before signing any agreements / contracts.

If you want to file a complaint, you would do so though the Nevada Business and Industry

7220 Bermuda Rd., Suite A., Las Vegas, NV 89119
Phone (702) 486-0780 Fax (702) 486-0785

They have an online consumer complaint form. You can type in your information, but it must be printed and mailed as it won't save as a digital document, or automatically file electronically.

Hope that helps, and good luck.

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X, , Kirkland, WA
Tue Oct 27, 2009
Each lender is different in how they work and operate. I am assuming you knew they were going to be charging you for the appraisal since you gave them you CC number.

They should have done a pre-approval on you based on your qualifying criteria. As a lender/broker, you should always know if the borrower is pre-approved before ordering an appraisal. They should have collected your financial documents ahead of time to know if you would have been approved.

Did they tell you initially you were approved or just collect your paperwork and credit card number?

You may want to try working with a broker instead because they have the ability to work with a number of banks to find a solution for you. Good luck!
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