May 21, 2015
A reader asks, “I closed a cash out refinance in December 2014. The term was a fifteen year at 4.75%. I received a flyer from my lender in February that offered a 3.25% rate. I decided to inquire about a thirty year term as circumstances had changed significantly after the first of the year with my wifes job. The lender sent me a GFE and we locked in the rate. After a short while I was told I had to pay for another appraisal and basically resubmit all of the paperwork that I had previously sent to the lender. As of three months later I still have no refinance and am out of pocket over $500.”
“Is this legal to open two FHA cases within two months and why was a streamline refinance not considered? I have told the lender I am not happy with their services and am attempting to move my refinance to another lender. Do I have any chance of being refunded my appraisal fee? Should I contact a lawyer?”
We can’t comment on legal questions as we aren’t legal experts; to speculate whether the circumstances mentioned are legal or not gets dangerously close to areas where a lawyer would be needed.
That said, if a borrower suspects illegal or questionable practices at any stage of an FHA loan, it’s best to contact the FHA directly for advice and assistance by calling them at 1-800 CALL FHA.
There is one aspect of this reader question we can answer definitively: “Do I have a chance of being refunded my appraisal fee?” The answer in this case is no–the appraisal fee is for services rendered by the FHA appraiser, much in the same way you would have to pay a house painter, roofer, or window installer for the labor required to get the job done.
The appraisal fee is paid for the service and labor given and is not dependent on the outcome of that appraisal or what the borrower and lender do with the information.
The “Should I contact a lawyer?” portion of the reader question is strictly up to the borrower, but after consulting with the FHA it may be wise (depending on the outcome of that conversation) to consider looking for legal advice. Borrowers must do this at their own expense, the FHA cannot provide financial assistance in such cases.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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