Paying Subordination Agreement Fee
REM #F715
By Ilyce R. Glink
Summary: A reader decided not to go through with a home refinance after starting the process. Now the bank is charging a subordination agreement fee and additional costs. Ilyce explains that the loan application should outline all the fees.
Q: I have a problem. I was in the process of refinancing my home in Downer’s
Grove, Illinois, and decided not to continue with the refinance.
When I notified the mortgage company my broker told me that I must pay a $250.00 subordination agreement fee that I had agreed to pay when I signed the refinance application.
His boss then said I must pay a total of $476.00 for the subordination agreement, title and credit checks. A lawyer for the company then sent me a certified letter saying the total was $536.00. He said I must pay within 15 days or he would begin collection proceedings and I would then be liable for attorney fees as well.
Do I have to pay these charges? And if I have to pay some of them, why does the final number keep going up? Thanks for any help you can provide.
A: the answer to your question depends on what your loan application says.
When you signed your application, you may have agreed to compensate the lender
for certain costs and fees if you opted not to close on the refinance for any
reason.
Go back to your documents and see what they say. If they say you'll have to
pay all of these costs, then you might well have to hand over a check. If they
say you only have to pay the subordination agreement, or perhaps just the credit
checks, then you'll have to pay that.
If, however, your agreement doesn't say you'll have to pay any expenses, then
you might not owe them a dime. In that case, you can call the office that regulates
mortgage companies and banks in Illinois and file a complaint against the mortgage
company.
NOTE: This column is distributed by Real Estate Matters Syndicate, PO Box 366, Glencoe, Illinois, 60022. This column may not be resold, reprinted, resyndicated or redistributed without written permission from the publisher.
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