Mortgage home loan answers
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Should I pay the processing fee even though I did not take the loan?
Posted on December 12th, 2009 5 comments
L D asked:
I applied for a home loan but I did not take it. The mortgage broker charged me $830 for processing the loan and getting it approved. Should I pay this amount or can I get any concession?
ORLANDO5 responses to “Should I pay the processing fee even though I did not take the loan?”
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NO you do not have to pay ANY processing fees or anything like that on a loan that has not closed. That is a respa violation. The ONLY thing that they can charge you is for an appraisal or for credit reports and that is it!!! Don’t let them lie to you. You are not held accountable for anything but what I say if your loan did not fund and record and you have a new home!!!
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Yanswersmonitorsarenazis December 14th, 2009 at 23:12
$830 doesn’t even remotely resemble their actual costs. In most states, it’s illegal to accept an upfront fee to apply for a loan and make it non-refundable. There are exceptions though.
They can generally be paid upfront for actual 3rd party costs, such as appraisals, credit reports, fees for the underwriting systems, etc…
Was there ever an appraisal done? If so, if you don’t pay for it, the broker has to. And not the company, the actual person you dealt with. That’s one of the fun parts about this job, losing hundreds of dollars on loans that didn’t close.
Why didn’t you take the loan? Find a better deal elsewhere? Change your mind? Felt you were getting screwed?
If you simply changed your mind after being offered a fair deal, it’d be nice of you to offer to pay their actual 3rd-party expenses. Ask for an accounting. If there was an appraisal done, that’s easily $300-500.
If you haven’t paid him anything yet, you likely have zero legal obligation to do so. It’s part of our cost of doing business. Sometimes we make money, sometimes we lose money. Just like shoplifting and food spoilage, we all end up paying a small premium to offset those losses.
If you feel you should be refunded money you’ve already paid, put your request in writing. If you aren’t satisfied with their response, contact your state department of real estate and find out how the laws work for those upfront charges, maybe they can help you get it back.
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godged December 16th, 2009 at 04:39
Absolutely not. Did you sign anything saying that you would pay processing fees whether you accepted the loan or not? That sounds shady either way, I don’t know any lender that would do such a thing.
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hollywoodmelody December 17th, 2009 at 12:02
RESPA violation…..
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elizvillar December 19th, 2009 at 20:11
You have 3 days to back out of a loan and if you did you don’t need to pay a processing fee.
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yolandajdukes December 13th, 2009 at 04:52