Do I owe appraisal fee after the fact?

Let me just say that this isn't fair to the appraiser.. He was hired to do a job, which he obviously did, and delivered a product.. So he certainly deserves to get paid.. I'm going to guess that if the lender did in fact tell you upfront that he would need to do an appraisal, and that you would have to pay for it, upfront, and that if the value didn't come in, he couldn't proceed.. you probably would have given him the OK to move forward.. so just in shear principal, I think you would owe the money.. I'm going to say that somewhere in your paperwork there was a clause that stated you would pay for the appraisal.. Our company will not order the appraisal unless we collect the fee upfront and the borrower understands that it's not subject to refund if the number isn't high enough, or for some reason the loan doesn't go through.. I find it hard to believe that the lender did not disclose to you that the fee would have to be paid by you regardless of value... I would ask the lender to provide you with a copy of something that stated that you would be responsible for the appraisal. if they don't provide that statement, then I guess LEGALLY you might not be responsible.. ETHICALLY however????? I guess everyone has their own conscience to deal with.. But remember.. You're on a Mortgage Web Log... not an Attorney web log.. so consider my answer to your question more of a MORAL answer, rather than a legal one... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Appraisers do a job and get paid to do it like anyone else...if the results of their work are not favorable for you and result in the denial of a loan that really is not relevant or their fault, unless they made glaring errors in which case they can be disputed and resolved properly. Here at IKON we collect a credit card number from the applicant prior to the appraisal and they sign a document that tells them the details of what an appraisal is etc. and I'll bet you signed a similar document but no credit card info was collected. Bottom line you should pay the appraiser for the work done, they did their job. My question is, you say that the appraisal value came in above the loan amount, why would you declined a loan from that happening? That's the result you hope for.

I would tend to agree with the other postings. However, I do believe that some brokers out there are not doing a good enough job of explaining all the documents as well as the mortgage process. It's just bad business, I find that walking borrowers throught the process increases not only knowledge, but the borrowers propensity to refer future business. I guess the question for you is, if the broker had told you that you would not qualify if the appraisal was unfavorable and that you had to pay for it either way, would you have agreed? If you would have agreed, then I would say pay it. If you would not have agreed, then I would say they should eat the expense. Either way the Appraiser should get paid for the work he/she completed.

Let me start by saying that I am not an attorney and I not offering legal advise ... if the issue is pushed by them I would recommending that you consult an attorney. I have been a lender (Fayetteville) for over twenty-two years and for most of those I did not collect upfront and it was disclosed that the borrower would be responsible for the application fee if the appraisal did not meet the necessary value. As a result -- there were many times we as a company ended p writing the appraisal off due to the we were unable to collect. Most companies, including ours, have adopted a policy to collect the appraisal prior to ordering the appraisal. Once the appraisal is received you (borrower) receive a copy of it. In regards to coming higher than the loan amount but not high enough for the transaction to go through... the LYV (loan-to-value) will differ with mortgage products - example if the max ltv for the product is 90% and the house appraised for $200,00 the max loan amount could only be $180,000. In regards to SIX months.... wow. You are more patient than most. We work very hard to have our loans closed within 21-30 days. If it is taking six months to complete the process or obtain an answer regarding approval you may want to obtain a second opinion. I would be glad to talk with you. Bryan - bwright@unmhq.com

If you did not receive or sign any paperwork then the lender is not legally allowed to charge you fees. And why would they say they'll give you your paperwork if you pay them? What paperwork do they have that you care about? if they holding your personal documents (tax returns, W2's, etc) they cannot hold them hostage over an unpaid fee and should return them immediately upon request.Daniel.Hennek@guaranteedrate.com

Have to agree with what others have said, but none of us are lawyers. Essentially unless you signed something agreeing to pay for the appraisal LEGALLY you may not be required to pay the cost, but morally I think you have an obligation. It shouldn't take a lender 6 months to approve or deny the loan -especially if it was HARP eligible as long as you promptly provided any information or documentation requested for your loan.

Ultimately, the lender or the lenders agent is responsible for the appraisal fee. Whether that fee is to be collected prior to the completion of the appraisal report or at closing (usually included in the borrowers closing costs). If the loan does not close it is of no consequence to the appraiser. The lender must pay the appraisal fee makes no difference if they collected from the borrower or not. Always has been this way and there has been no changes in this respect. As an appraiser for 20 + years I have only been "stiffed" on appraisal fees twice. Both were my fault for lack of documentation or follow up. I have not lost a fee in a decade. Under recent regulatory changes the appraiser does have some avenues to collect past due invoices and this option is not a good one for lenders. Particularly if the loan is an HUD product. The CFPB, Office of The Comptroller of the Currency and others do not look favorably at this kind of lending behavoir. The states also have measures to insure the appraiser is paid. Any lender that has ever gone through an audit will likely never "stiff" an appraiser.So, the appraiser will be paid. Either sooner or later. The lender or lenders agent will pay the fee. The borrower really is under no legal obligation to pay any fee after the fact. It is true that the report really becomes of little use after 6 months. In reality more like 90 days. BUt the law is clear here too. The borrower, or applicant, is entitled to any valuation reports completed on their behalf. Appraisals, AVM's, BPO's anything. That is federal law.Good Luck