Responsible for Appraisal Fee If Loan Doesn't Go Through

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orgopeach_IHB

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I purchased a home mid-August. I first went with Wells for the loan. However due to some personal issues, it did not go through. I had to go with BoA. Before I started the process with BoA, I asked the mortgage officer, who is a friend of a friend, if I would be hit with any fees since my loan did not go through. He said no.



Today I get an email:

"I am sorry if that was mis communicated.

The loan cancellation and penalty is paid by our branch, but in terms of the Appraisal report, since we are only collecting it for the 3rd party, there's invoices that they send.



We got the invoice from the work that they performed and that is the reason I forwarded you the email.

my colleague is being hit with the inovice and if you don't pay I will have to pay out of pocket. I felt bad for all the time her and I spent on this and I certainly can't let her bear the cost.



Please let me know your thoughts"



(http://www.searchlightcrusade.net/2009/04/loan_providers_offering_to_pay.html) I believe I am not on the hook legally for the appraisal. Any experience on this issue? The tricky part is that this person is a friend of a friend. If it were not, I would not give a second thought to denying the request.
 
you are not on the hook for the appraisal. it sounds like the loan officer/company is on the hook for the cost and they are trying to pass it on to you. if you dont want to pay it dont. or have then provide you with documentation stating that you are responsible for the cost of the appraisal just to cover your butt. if they cant (which they cant) dont pay it.
 
Typically with most lenders, they will require you to pay for the appraisal upfront directly to the appraisal company. In your case, because of your relationship with the lender that was not required. The appraisal is a third party non-lender cost. That being said, the lender did state to you that you wouldn't be charged anything. I would say that you don't have to pay for the appraisal cost, but it may cause some ripples with your friend with the friend and the lender because he will have to eat the cost.
 
Actually couldn't the second bank have used the first bank's appraisal?



Per Fannie Mae:

The lender may accept an appraisal prepared by an appraiser for a different lender, including where a mortgage broker has facilitated the mortgage application (but not ordered the appraisal), provided the lender: (1) obtains written assurances that such other lender follows this Code of Conduct in connection with the loan being originated; and (2) determines that such appraisal conforms to its requirements for appraisals and is otherwise acceptable.



The second criteria is the kicker? "Conform to its [the second banks?] requirements for appraisals"
 
[quote author="orgopeach" date=1254805979]Actually couldn't the second bank have used the first bank's appraisal?



Per Fannie Mae:

The lender may accept an appraisal prepared by an appraiser for a different lender, including where a mortgage broker has facilitated the mortgage application (but not ordered the appraisal), provided the lender: (1) obtains written assurances that such other lender follows this Code of Conduct in connection with the loan being originated; and (2) determines that such appraisal conforms to its requirements for appraisals and is otherwise acceptable.



The second criteria is the kicker? "Conform to its [the second banks?] requirements for appraisals"</blockquote>
Yeah, banks can use an appraisal report that another bank ordered as long as it passes its appraisal review. I've had it happen a few times during my commercial real estate financing days. I don't know how it works on the residential side though. That being said, certain lenders have their own list of approved appraisers that they like to use.
 
If the lender committed to you in any format that you would not be charged for the appraisal, then you won't get charged for it. WF pushes uncollected fees (committed often as a "cost of obtaining business") back onto their LO's when WF should simply suck it up and move on. The LO is going to have to take his $$ and pay for this appraisal because they made the risk decision to press forward when there was zero certainty that the loan would close through them. WF has fee agreement forms you the borrower have to sign in the processing of the loan. May want to check to see if you signed that form.



The cost to you is perhaps an awkward change in your friendship terms with the referring party. That uncomfort can drag on for years. You might want to pay the $$ to save face. Yes, it's real money. Yes also it's going to come between you and this referring friend.



My .02c



Soylent Green Is People.
 
Moreorless it boils down to I am not legally obligated and if I pay or offer to split the cost to put the akwardness in the relationship between a friend of a friend. The referring friend knows of the situation and doesn't care either way.
 
[quote author="orgopeach" date=1254810711]Moreorless it boils down to I am not legally obligated and if I pay or offer to split the cost to put the akwardness in the relationship between a friend of a friend. The referring friend knows of the situation and doesn't care either way.</blockquote>
I think it's fair to say that you are not legally obligated to pay for the appraisal. If it doesn't cause any cause any drama with any friendships, that much better.
 
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