Just started the refinance process today, can I stop it and get my money back?

[moe0303]

What is the name of your state? Florida

I just started an application for a refinance over the phone. The mortgage co. told me they would need a payment of $350 in order to lock in the loan. I'm starting to have second thoughts about dealing with this company. Do I have any recourse to get my $350 back? Thanks in advance for any help.

[FlyingRon]

You can ask them (and the sooner you do the better). However, application fees (which this sounds like it is) and lock in fees (which usually come after approval) are not usually refundable.

[dmiller12]

I'm sure it's too late by now, but the best way to get your fees back is to close on the loan and cancel the loan during the recission period. The lender would be required to refund all fees in that case.

[LindaP777]

Originally Posted by dmiller12

I'm sure it's too late by now, but the best way to get your fees back is to close on the loan and cancel the loan during the recission period. The lender would be required to refund all fees in that case.

You gotta be kidding me??? So you think the bank should go through all of the leg work, paperwork, paying off the first loans, paying for title search and appraisal, just so the OP can rescind and get their money back? What have you been smoking?

OP, do not listen to the advice from dmiller12.

[dmiller12]

The poster asked how to get her money back and this is the legal way to do it. That's why the law requires a rescission period. Sorry! I didn't write the law.

[ShyCat]

dmiller12, please provide a link to the statute that you (and only you) believes to exist that makes all fees refundable. Otherwise, stop misleading the OP.

[dmiller12]

Do a search for the Federal Truth-in-Lending Act. Then search right of rescission.

[ShyCat]

Okay, dmiller12, I'll help you out. The "Federal Truth-in-Lending Act":

[url]http://www.fdic.gov/regulations/laws/rules/6500-1400.html[/url]

Clicking the index link to § 226.23 Right of rescission under Subpart C—Closed-End Credit takes you to...

[url]http://www.fdic.gov/regulations/laws/rules/6500-1700.html#6500226.23[/url]

So, where exactly is your "all fees are refundable" rule?

[dmiller12]

[I]§ 125. Right of rescission as to certain transactions

(a) Except as otherwise provided in this section, in the case of any consumer credit transaction (including opening or increasing the credit limit for an open end credit plan) in which a security interest, including any such interest arising by operation of law, is or will be retained or acquired in any property which is used as the principal dwelling of the person to whom credit is extended, the obligor shall have the right to rescind the transaction until midnight of the third business day following the consummation of the transaction or the delivery of the information and rescission forms required under this section together with a statement containing the material disclosures required under this title, whichever is later, by notifying the creditor, in accordance with regulations of the Board, of his intention to do so. The creditor shall clearly and conspicuously disclose, in accordance with regulations of the Board, to any obligor in a transaction subject to this section the rights of the obligor under this section. The creditor shall also provide, in accordance with regulations of the Board, appropriate forms for the obligor to exercise his right to rescind any transaction subject to this section.
(b) When an obligor exercises his right to rescind under subsection (a), he is not liable for any finance or other charge, and any security interest given by the obligor, including any such interest arising by operation of law, becomes void upon such a rescission. Within 20 days after receipt of a notice of rescission, the creditor shall return to the obligor any money or property given as earnest money, downpayment, or otherwise, and shall take any action [/i]

[ShyCat]

How lame. The quoted text (from a different section related to consumer credit transactions) still doesn't say all fees are refundable. Finance charge, interest, earnest money, downpayment... yep, no problem. Every mortgage and refinance transaction I've been involved with included fees that were clearly described as non-refundable, such as application fee, credit check, appraisal, termite inspection. All of that was clearly stated up front. I don't know if the OP's rate lock fee was non-refundable, since I can't see the OP's paperwork, and perhaps that might be considered "finance charge or other". But I do know that NOT ALL FEES ARE REFUNDABLE. To believe otherwise would be foolhardy and potentially costly.

[dmiller12]

It's open to interpretation I agree but as a real estate mortgage lender for 16 years the lenders I've worked for have all refunded all fees in cases where the borrower rescinds. If they cancel the loan prior to closing then not so.

I'm not a lawyer and I don't wish to argue with you about whether "other" applies here or whether "this section" applies however, the lenders I've worked with and continue to work with refund fees and it's not out of the goodness of their heart. There is a legal reason they refund.

In the Ops case she already paid the fee so she has nothing to lose and only potential gain if she closes the loan and rescinds.

I agree it might not be the morally right thing for the OP to do, but I'm assuming she has good reason to have decided not to work with this lender. Let's face it, it's not hard to imagine that she may have happened on a lender that deserves this type of treatment. Unfortunately there are still plenty of them out there.