Backing out of a refinance because of disatisfaction with lender.
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Backing out of a refinance because of disatisfaction with lender.
I applied for a refinance, paid for appraisal and credit report up front. The processing took forever, long enough that my original application expired and I have to do another. I want to refinance elsewhere, but would like my appraisal and credit report money refunded. There is a disclosure that states it would be refunded if an applicable law applies. Is there a law in NY state that I can apply to this situation? I was told there may be one that allows anyone to back out of a refinance and all costs would be refunded. Thanks for any help you can provide.
Asked on May 21, 2009 under Real Estate Law, New York
Answers:
S.J.H., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
You are not entitled to get back the appraisal fee or credit report back since these were fees done by a third party and not necesarily the loan processor. However, you do own the appraisal and you could have the appraisal certified to the new lender which may save you an additional appraisal fee if the new lender approves. As to any processing fees that were charged by the processor, that you may be able to seek reimbursement if you can show that the delay was not caused by you but by the processor. They in all likelihood will not necesarily give it to you unless you use them again for a different loan. If you are truly unhappy and can establish that they cost you the loan, you could file a formal complaint with the banking department.
MD, Member, California Bar / FreeAdvice Contributing Attorney
Answered 14 years ago | Contributor
Usually, lenders are allowed to collect monies for services rendered, regardless of whether the loan closed or not. If they actually got an appraisal and a credit report, your possible option would be to file a consumer complaint through the NY State Banking Department.
Explain your situation and the fact that the lender didn't practice good faith by basically unduly delaying your application process. Ask for the money back and see what happens. By going through the administrative agency, you are exercising your administrative rights. http://www.banking.state.ny.us/
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