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Refund 3rd Party Fees if Loan is Denied?

Answered by: 
Dan Persfull
Andy Zavoina

Question: 
If 3rd party fees were collected at application and the loan is denied and an adverse action notice is sent out, do the 3rd party fees collected need to be refunded if the services were provided (credit report and appraisal)?
Answer: 

Answer from Dan: Not under Federal regulations.

Answer: 

Answer from Andy: Just don't confuse this with a rescission. I have heard of customers who would ask for a denial for a free credit report or withdraw because they found better loan terms, but then decide to go all the way to closing only to rescind because then they received refunds. But as your specific issue with a denial, I agree with Dan.

First published on BankersOnline.com 1/9/12

First published on 01/09/2012

Filed under: 
Lending
Filed under lending as: 
Adverse Action
Credit Report
Fees

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