Loan Application Fee

[TomSanders]

What is the name of your state (only U.S. law)? CA

My friend replied to a mail promotion to refinance his mortgage. He called and gave the required information on phone. He has also gave his credit card number for the loan application fee. He received the application package in email and by mail. But then he changed his mind and decided not to apply for the loan. He has not signed the application forms nor did he return them to the lender yet. But now he found his credit card has been charged for the loan application fee.

Is he in good legal standing to ask for the refund? I think he should be refunded because the fee was for loan application but the application has never been filed. Thoughts?

 

[HUD-1]

If the lender performed no services, then they should not be entitled to a fee. Usually lenders collect the fees for an appraisal and credit report upfront.

 

[TomSanders]

If the lender performed no services, then they should not be entitled to a fee. Usually lenders collect the fees for an appraisal and credit report upfront.

Thank you for your reply.

They call the fee that they have charged 'application fee'.

They took information on the phone and they did prepare the application package. They have also sent the package to my friend. But my friend did not sign the application form and return to them. So no application has been filed. Is taking information on the phone and preparing the application package considered 'chargeable service'?

 

[HUD-1]

How much was he charged and is it commensurate with the services provided?