I went to Wells Fargo and they ran a scam on me. At wells fargo i applied for a refi & the mortgage banker needed to collect $485 from me up front to pay for a credit report & appraisal fee but assured me and my wife than nothing would be processed until he had a verbal approval from their underwriter that the loan would be granted. We were not approved and after receiving a letter from the bank I checked my visa statement and it showed that the full amount has been charged to us. It's obvious that the Banker is a liar and his word is no good. Another Bank is now working with us and asked if we received the appraisal we paid for - which at the time I didn't know we had paid for but didn't receive. I know banking laws have changed so bankers can't collect fees until they know they can make the loan, but this guy is either trying to pull a scam or doesn't know the laws. We did receive a copy of our credit report dated 3/16/10 which he gave me prior to signing anything or paying any money. My other Bank is using it to pre-approve our loan request before pulling their own report. My questions are what's the best recourse in dealing with Wells Fargo & what legal recourse do I have in being reimbursed these charges and exposing this Bank's lending practices. Is this a scam run by Wells Fargo?
It is not illegal to collect funds up-front for an appraisal. In fact, in the industry it is standard operating procedure to do so, so it sure doesn't sound like a scam run by Wells Fargo.
A loan will not fund before an appraisal is complete, if the lender required an appraisal. A loan is contingent on the appraisal demonstrating a certain value.
If the borrower does not have something in writing that states he or she is due a refund of the appraisal fee should the loan not go through, he or she has no real recourse.
However, I recommend you call Wells Fargo Customer Service and try to convince them that a refund is a small price to pay to assure that you will consider patronizing Wells Fargo in the future. I am not optimistic, however, that you will be successful, but it never hurts to try.
I hope this information helps you Find. Learn & Save.