Financing in 94596>Question Details

Tim, Home Buyer in Walnut Creek, CA

canceling refinance application, am i responsible for any fees?

Asked by Tim, Walnut Creek, CA Fri Dec 12, 2008

I canceled my refinance application with a bank and I was charged with the cost of appraisal (400 dollars), but they did the appraisal on the computer and not actually sending someone out to my house, is it right for them to charge me ? I cancel my application before an underwriter even contacted me.

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Hi Tim,

Let me ask you this, did you receive the good faith estimate, TIL, and HUD Booklet in the mail? Did they take the money out of your credit card prior to this? This is also a direct violation of the law. They can only collect a credit report fee prior to providing you disclosures. If they mailed disclosures there is a 3 business day waiting period before they can collect anything else on the 4th business day to allow you time to receive and review the documents. If this is the case, then take your complaint to the Consumer Financial Protection Bureau. If they didn't send you these disclosures, you may want to call them and explain to them that they are in direct violation of Reg Z. It states, "No fee, other than credit report, may be collected nor imposed prior to delivery of TIL and other required disclosures".
1 vote Thank Flag Link Tue Jan 10, 2012
Actually, assuming this is a primary residence, you could go all the way to loan documents and then sign the 3 day right of recission and they would have to refund every dime they ever collected from you. That is the law :)
1 vote Thank Flag Link Thu Dec 15, 2011
Tim, And, I would encourage you to contact Jayne for any future financing needs. Obviously, she not only knows her "stuff", but is ethically bound to doing it right...every time. There are many times over the past few years that I have not always been "proud" of the mortgage industry. However, I know there are many, many mortgage professionals who are ethically committed to serving our clients with respect and honesty. I just wish more people would reward the talents like Jayne (and several others here on trulia) instead of shopping for the lowest possible rate. An 1/8 point saved is often the beginning of a nightmare such as you have endured. Best to you!
0 votes Thank Flag Link Tue Jan 10, 2012

@Jayne is your correct answer. Contact the bank..ask to speak to a manager...or dispute the charge on your credit card. You cannot be charged for an appraisal if you do not complete a refinance transaction on your primary residence. Second homes and investment properties do not have the same protections; however.
0 votes Thank Flag Link Fri Dec 16, 2011
Thanks for all of your answers. I didn't sign anything. I did everything through the phone and the only forms that I signed was the credit consent form.
0 votes Thank Flag Link Fri Dec 12, 2008
You need to check the forms you signed. If you did not agree in writing to any type of cancellation fees or costs, then the answer is NO. If you did then you are hopefully saving much more than that by canceling your refi. Even if you did, what is their recourse?

Remember gang, the banks are NOT YOUR FRIEND! They are there to extract money from you any way they can! You must stand up for yourselves or they will walk all over you. Unless it is in writing you do not owe it. Tell them to take it out of the TARP money YOU have already paid them!

Pick your battles carefully and remember that standing on principle can be VERY expensive. But always stand up for yourself, because the banks are ONLY looking out for themselves.
0 votes Thank Flag Link Fri Dec 12, 2008
Hi Tim,

Sounds like the bank ran an AVM (Automated Value Method) appraisal - these don't cost $400! You should review any paperwork that you signed to determine whether you owe any money. Some lenders do obligate clients to a reimbursement policy; others see this as a cost of doing business. Your answer will be contained in the text of any documents you endorsed.

Best Regards,

Steven A. Ornellas, GRI, ABR, e-PRO, CMPS, RE Masters, MBA
REALTOR® / Mortgage Banker-Broker / Certified Mortgage Planning Specialist
Steven Anthony Real Estate & Financial Services
Expect Excellence. Get What You Expect.â„¢
Cell: 510.461.6011
0 votes Thank Flag Link Fri Dec 12, 2008
You need to read your contract and signed application information. Ultimately they "did" do work on it. And an appraisal costs money (computerized or not). Even a buyer of a house will be charged for an appraisal fee if cancelled after appraisal, though they usually do go out, it is still an out of pocket expense to the bank. If what you signed does not commit you to the fee if cancelled, then you may have a right to not pay that, but if they already have the fee, you may have to go to small claims court. Just have your documentation scoured and be sure.
0 votes Thank Flag Link Fri Dec 12, 2008
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