Real Estate Law
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Under 24 C.F.R. Sec. 3500.7(a)(4), a lender may not charge any fees in connection with providing a Good Faith Estimate, as required by the Real Estate Settlement Procedures Act. The collection of the earnest money is likely an attempt to circumvent federal law.
Most reputable lenders that I have dealt with only charge for the real estate appraisal. Everything else is taken out of the loan proceeds at close of escrow.
Hope this helps.
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The only thing I know about AMC is that they appear to settled several Federal Trade Commission complaints against them concerning overreaching in their sales tactics (e.g., violation of the federal "do-not-call" registry regluations).
I still maintain that charging an upfront fee is illegal, even if you're entitled to get it back on closing. But, that's up to you.
I appreciate that effort. It may be useful to future customers with similar concerns.