Hi, this is my situation: I was trying to do a 30 year fixed refinance for a rental property and submitted an application with a loan officer. After spending more than a month going through the process, I was told by the loan officer that the loan was declined because he submitted the application for a conventional loan and did not realize that the occupancy rate of the building was around 30% (way below the 50% required by Fannie and Freddie). He further stated that he looked at a website owned by a realtor for reference on the occupancy rate and it stated 51% and thought it was fine. He never called the management company to verify despite the 51% being on the cusp of the requirement threshold. Meanwhile I paid about $700 for an appraisal and other fees for condo documentation.
The loan officer offered to remedy the situation and source a portfolio loan that have no limit on occupancy rate. Given the time I already sunk on this, I agreed thinking it would result in a quicker turnaround. Another month goes by and he tells me that the other option he was trying did not work. Then tells me that he can get me a 25 year loan, which I cannot accept. I finally decided to pursue other options. In two days I found another loan officer that can provide the loan that I initially set out to get. While I was able to transfer the condo docs to the new lender, I needed a new appraisal because the first appraiser is not on the approved list of this new lender. I requested the first loan officer to reimburse me for the $700 spent on the appraisal but he refused.
While I understand that appraisal and credit report fees are typically not reimbursed for a declined loan, I believe I am entitled to a reimbursement because the loan officer was negligent and submitted an application that had no chance of being approved. I am only request for the $700 I paid out of pocket.
Am I entitled to a reimbursement? What are my legal recourse?
Thank you in advance for your professional opinion!
The loan officer offered to remedy the situation and source a portfolio loan that have no limit on occupancy rate. Given the time I already sunk on this, I agreed thinking it would result in a quicker turnaround. Another month goes by and he tells me that the other option he was trying did not work. Then tells me that he can get me a 25 year loan, which I cannot accept. I finally decided to pursue other options. In two days I found another loan officer that can provide the loan that I initially set out to get. While I was able to transfer the condo docs to the new lender, I needed a new appraisal because the first appraiser is not on the approved list of this new lender. I requested the first loan officer to reimburse me for the $700 spent on the appraisal but he refused.
While I understand that appraisal and credit report fees are typically not reimbursed for a declined loan, I believe I am entitled to a reimbursement because the loan officer was negligent and submitted an application that had no chance of being approved. I am only request for the $700 I paid out of pocket.
Am I entitled to a reimbursement? What are my legal recourse?
Thank you in advance for your professional opinion!
