Issue with HML lender demanding fee for a dead deal

[Jennifer L. Harrell]

I am in Ohio - I have been dealing with a HML broker (my first mistake), he was referred to me by a fellow investor. I have been working with him for close to 3 months (in that time I have extended my current HML loan twice at $1,000 each time). With each new "deal", he calls on the phone with "terms" most often not in writing and not what I am looking for. I have paid for two appraisals and several app fees with nothing to show for it. At this point I am beyond done with this individual. I am out $4k in appraisals, fees & extensions. Now HML broker has sent me an invoice for $3,500 demanding I pay it immediately because he fulfilled his contract obligation to me. I never signed a contract and I don't have a closed loan. Is this person for real? Am I missing something?

[Jon Holdman]

You say:

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I don't understand.  How can you extend a loan you don't have?  I understand paying for an appraisal before closing the purchase.  That's pretty typical.  Application fees are more dubious.  Underwriting loans that don't close is part of the business.  Big up front fees are often a sign of a scam.