Does a mortgage company have the right to charge you for a home appraisel?

Question

I have been working with a mortagage company for over a month, trying desperately to get out of an ajdustable rate mortgage I currently have. They lead me on week after week how close they were to closing. The only problem they said was they weren't happy with the appraisel, so he sent a second appraiser to my house. After about 5 weeks, he sent me an email stating that he couldn't re-finance me, given the way the market is, and I owe too much on the house. The true shocker was when he said I needed to send him a check for $700 to cover the 2 appraisels. I was horrified, and said to him that it seems like a scam because he never mentioned any cost to me, ever. He never answers my questions directly when I ask him why, (such as why did he send 2 appraisers, fed me lines for weeks, and never mentioned cost to me) yet says he will sent me to collections and it will ruin my credit. Was I possibly scammed? How do I handle this?

Thanks so much for your advice.

Answer 1

First thing all you Mtg brokers need to know this. I am a Certified appraiser and here is the scoop. By Federal Law the person who orders the appraisal, owns the appraisal even if the homeowner pay COD at the door to the appraiser, the Lender that orders it, owns the appraisal but the homeowner has the right to a copy from the lender. Tell the Loan officer, he ordered it, they own it and you are not going to pay for it. He cant send you to collections because it is between the Mtg and the appraiser. 2nd "appraiser can not accept an assignment contingent on a predetermined value or contingent on the obtainment of or closing of a loan” and doing so is also a violation of the Uniform Standards of Professional Practice, USPAP, as mandated by federal law. The appraiser and the Mtg compay should have had this worked out prior to the appraisal being done. The Loan officer needs to pay for the appraisals. The appraiser can not do anything to you because you are not his client the Mtg company is and you did not order it. This is why I only accept assignments that are COD or paid by credit card. If your mtg company call me and wanted to order a appraisal the first question I would ask is "how is payment going to be made?" If he tells me it will come out of closing, I tell him that is illegal and they alway say "we do it all the time" and I tell him just because he is breaking the law, dont involve me in it. I also tell him that I would be glad to accept his personal credit card or a personal check or a check from the homeowner but with a check the report will not be released until the check clears my bank. Most of the time they hang up because they a fishing for values and will not back up their mouth with their money. Hopes this helps.

Answer 2

You weren't scammed, since it's common for the borrower to pay for any appraisals needed to complete a refinance. Without an appraisal, you would stand ZERO chance at a refinance. Apparently your lender was trying whatever he could to get you to qualify for a refinance. However, if he fails, you're still responsible for the costs of the appraisals.

Other posters are correct. You need to have signed authorization to pay for the appraisals, but I'm guessing that agreement was in the application you signed.

Answer 3

Yes, they do. All homes have to be appraised before underwriting a mortgage and someone has to pay the cost. Unfortunately, most won't pay just to get paid on the loan. You may find a company to pay it for you, but they may just transfer the costs to some hidden fees. Either way you are still paying....sorry. You can contact your state department that regulated mortgage bankers and inform them of your situation to see if they can help. Good luck

Answer 4

It is not uncommon for the mortgage company to order an appraisal, however, they must disclose that they are going to charge you for it.

Go through everything you signed and see if there is something stating you have to pay for the appraisal whether the loan funds or not. If you didn't sign a form authorizing this, they will not have recourse to charge you.

Answer 5

Wait back the hell up.

The mortgage company ordered an appraisal without signed authorazation you would pay for it? Dont get me wrong I do it all the time, but if im wrong I eat the cost. I only charge if it closes. Thats why mortgage companies have you pay for it upfront. They know they are the ones ordering it.

If you were in Utah they couldnt charge you. I dont know your state law. The appraisal is ordered by them in their name. I dont see how they can charge you a dime.

Tell them to go to hell. If they threaten collections or anything else find out where you signed saying you would pay for it.

I dont think they can charge you or win in court.

Answer 6

Any verbal contract over 500$ must be in writing to be enforceable. He can send it to collections, but you will have to dispute it. Hate to say, but you probably will be forced to pay for at least one of those appraisals.