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.

Published: Sep 2, 2006