Is lender obligated to refund home appraisal fee if I decide to cancel the refinance?

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I tried to refinance my mortgage but on the day of the closing, nothing was as promised. The bank added 1/2 point to the loan when it was supposed to be a no-point refinance, the home appraisal was missing, even though the bank said they’d have it there. We waited 2 hours at the attorney’s to get revised paperwork from the bank only to end up with a “credit” for the 1/2 point, with the 1/2 point still showing everywhere on the paperwork. The attorney, who represents both me and the bank, said that if I changed my mind and decided not to go through with the refinance, the bank was obligated to refund me the home appraisal fee. The bank, however, says they’re not going to. I’m in the state of New York. Can someone who knows this for sure tell me who’s right, and point me to a law that would confirm the answer, whichever way the answer points to?
Thanks to the person who responded. The lender agreed to refund the money because, according to New York State law, if a person changes their mind on a refinance, they have to able able to do so without incurring any expenses (“be made whole” as the law states.) Just thought I’d put it out there if anyone is ever in the same situation…

I’ve been reading about the Wall Street bailout for days. I’ve been trying to understand what caused it. Now I read an article in the Daily News and in Crain’s New York that city renters could be next victims of mortgage mess.

The articles goes on to say that “An increasing number of apartment complexes face possible foreclosures and thousands of city renters could be the next victims of the mortgage crisis housing advocates warn. At least 580 buildings containing 40,000 units have one or more factors that could lead to mortgage default, Crain’s New York Business reported yesterday on its website.

Private equity firms bought at least 90,000 affordable housing units in the past four years, many at inflated prices in badly leveraged deals, according to the Partnership to Preserve Affordable Housing.

The Riverton apartments in Harlem and Stuyvesant Town on the East Side are both at risk, according to the Crain’s website. Riverton’s owners indicated last month that they were on the verge of defaulting.

And Savory Park, a seven building complex in Harlem has been placed on a watch list. Appollo Real Estate Advisors and its partners bought the complex in 2006 for 175 million.

Appollo refinanced a year later, increasing the debt to 367.5 million, the credit rating agency Realpoint reported. The agency called the risk of default on the load “moderate to high.”

Housing advocates told Crain’s that buyers had unrealistic goals about rent increases. The same lenders caught up in the mortgage free-for-all in single family homes lent them money any-way.”

If these companies default on the mortgages (loans), what happens to the renters? What can the renters do? Can the renters do anything?

I live in one of the housing developments purchased by Appollo Real Estate. What can the tenants do?

  1. Reply
    January 26, 2011 at 10:21 am

    I am going to take a leap and say ‘No’ they wouldn’t have to refund the money. If someone gave you a deposit to clean their carpets and you did one room and then they changed their mind, would you give the money back even though you did some of the work? You more than likely signed a contract that stated there would be fees included that you would be responsible for, regardless of the outcome.

    You should pull the contract out and read the fine print.

  2. Reply
    January 26, 2011 at 11:15 am

    Of course not. The appraiser has already done the appraisal. Why shouldn’t he get paid when it was you who backed out?

  3. Reply
    January 26, 2011 at 12:08 pm

    I own much much much smaller apartments in Washington State. I bought a small complex which had been foreclosed. All of my loans have a provision which assigns the rents to the lender in case of foreclosure.

    If your building is foreclosed on, then whoever takes possession of it will want you to pay them rent. They will want all the tenants in place and paying rent – so don’t worry too much.

    In all of the situations I have experience with, maintenance and other services suffered some, but then owners in financial distress don’t do a great job at that stuff either – so you might not notice too much of a change.

    You could move, but I wouldn’t. You can protect yourself by keeping good records: your lease agreement, receipt for deposits, receipts for rent – or canceled checks. I think your greatest problem is likely to be poor coordination between the different people likely to be managing your apartments. You can protect yourself from that by having your stuff together.

    Good luck

  4. Reply
    January 26, 2011 at 12:55 pm

    Rental agreements will be void. The new owner can decide what to charge for rent. If yours is at the market rate and the new owner wants to keep you, you many not notice much change.

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