John Kennedy at M&T Bank gave me a Good Faith Estimate for a refinance loan on my single family residence townhome. Based on a guaranteed 30-day rate lock, I paid $400 for an appraisal of the property.
After the appraisal came back, John told me he didn't realize the property was a town home. I reminded him that I had told him it was. He said he had assumed the property was a detached single-family residence based on a Zillow.com listing.
The Zillow website showed that it was actually a town home in a Google maps photo at the bottom of the page, but it appeared John had overlooked this. Then John said he would have to re-quote the loan at a higher rate based on the error in classification of the town home. The higher rate no longer saved me enough to make it worthwhile, so I declined, and told him I would like the $400 I paid for the appraisal to be refunded.
John, as well as his superior argued that the mistake was not their fault, but the property mis-classification was clearly their mistake. Because of John's mistake, and M&T Bank's refusal to refund my money, I spent $400 for nothing. Several other lenders I spoke with and told my story to said this was clearly M&T Bank's mistake, and that they should refund my money. Now my credit report shows a serious delinquency since I refused to pay the $400 charge based on non-performance by M&T Bank for the service they had assured me I would obtain from them.
By law I have the right to refuse to pay for a loan rate that was locked in but later revised. It does not seem fair to me that I had to pay for their error in classifying my town home correctly due to negligence on their part. Due to John's error in mis-classifying the property, I paid $400 for nothing. Trying to get me to accept a higher interest rate loan and I paid for the appraisal seems like "bait-and-switch" to me.
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