The reason I asked is because one of my co-workers just got a totally jacked deal with them...bought a condo through a developer who used Emigrant. She's 23 and kinda naive, so I am not sure who gave her the raw deal, but her good faith estimate listed a 30 year fixed rate and when she closed she got a 5 1/2 arm with a prepayment penalty and 18% late fee payment if she's 15 days late. I am afraid this place won't report her to the big 3 UNLESS she is late...she didn't understand me when I told her some lenders want to keep you as a customer with their HIGH RATES, etc...the poor kid cannot refianance for 3 years, etc...
LATE FEES ARE NORMAL 15 days is WAY BETTER than MOST credit cards!!! MOST credit cards late fee "CAN" be imposed on the due date after as early as 11am!!!!!! AND you might be JACKED to penality rate of 29.99% or higher!!! PRE-PAYMENT PENALITY is normal in many cases...it may be that she can't RE-FI till after 5 years...MINE IS ONE MONTH INTEREST PRE-PAYMENT PENALITY...(I pay interest in arrears)
It's really hard to judge a loan without getting all the details. Where I work, we don't do prepayment penalties on conforming loans, but there may have been credit or income issues that forced her to go non-conforming. She may have chosen the ARM for a lower rate. I don't know anything about this mortgage company, but I do know I wouldn't do anything to make someone feel bad about their first home purchase.
...the woman at the complex she bought her condo at went no-doc because this girl has a low income (about $21,000, buying a $90,000 condo with 5% down). The good faith letter she received was for a 30 year fixed rate..plus they didn't tell this kid the name of her lender until closing. Is this legal? Plus 1 hour notice on her closing costs. Her attorney advised her to walk away from the deal at closing, but she did not want to lose her down payment money. I imagine the kid does not have good scores because she only has a cell phone, no car payment or credit cards. She does have $9,000 or so in the bank after the down payment and closing $ and her parents gave her a new car, but I still feel like she was jacked....is it legal to not give a good faith estimate or the incorrect one, plus she found out at closing it was a 5 1/2 arm vs. 30 year fixed. Sorry, I too am naive about some of this stuff.
Hmmm, I don't have a calculator on me, but if she had no other debt she shouldn't have had to do no-doc. The problem with making a statement like that is there may be factors I don't know about. A good faith estimate doesn't have to match the final loan. To comply with the law (and common sense) it just has to give a realistic itemization of the expenses involved. When I do a GFE, I take pains to make the numbers as close as I can get them, even going so far as to find out in advance what month their insurance is due so I can figure out how much will need to go into escrow. I love it when my customers bring them to closing and compare. At the same time, it's not uncommon for me to have a customer (who hasn't made up their mind what they want) sign a GFE based on a 30 year fixed so I can get started on their loan while allowing them extra time to think about what program they actually want before I lock the rate. I only do a new GFE if the loan program changes dramatically, like if I have to go with a non-conforming loan instead of conforming. Not telling the customer the name of the lender until closing...I don't either. Why? Well, that's complex, but I'll try to explain anyway. First, as a correspondent lender (small mortgage bank that sells loans to larger mortgage banks) I usually don't know the name of the lender until closing. It's my job to put the loans together, it's someone else's job to figure out the best place to sell the loan to. As a broker, I want the freedom to switch lenders if I need to. Once I put a loan package together, I can send that loan wherever I want. Most of the time I know which company it's going to from the start, but it they have problems underwriting the loan or if a competitor offers me a better deal, then I can switch. If the competitor offers me a better deal, I can pass the savings on to my customer. Not knowing the closing costs until the last minute...that's bad. Yet, it's happened to me before. When everything goes right, you have the final closing costs well in advance. The buyer brings certified funds down to the last penny to closing, and everything goes smoothly. Sometimes...you run into that nightmare deal. The loan is held up in underwriting, they come up with extra stipulations at the last moment, you have a contract with a closing date that can't be changed because the seller is going to be buying their new home the same day, the Realtor has picked some title company you've never heard of before...! What do you do? You do the math the best you can, round up and add a few hundred bucks for safety. You go to the closing, check the numbers to see if they're right, fix them if they're not, and the title company will cut a check for overages. The thing is the mortgage company, the investor and the title company all have a part in figuring out what those final numbers are, you can't have an exact figure until everyone has done their job completely. You never plan to do deals that need to be put together at the last minute, but sometimes it happens. Not knowing she was on an ARM until closing...she should have known. If the broker didn't tell her, shame on him. Further, at some point in the process, she should have had the option of choosing an ARM or a fixed rate, and if the broker started with an ARM and switched to a fixed rate without a damn good reason, then double shame on him. At the same time...I have had customers that don't want to know the details of the loans they get. They tell me, "Give me the lowest payment you can, and tell me how much to bring to closing." You give them a few choices, they pick one, then they don't want to hear about the advantages or disadvantages. Just about everything you mention is cause for concern. It may well be that she didn't get a good deal on her purchase. Still, without seeing the credit, the income, and without knowing why things happen the way they did, it's impossible to say if she was ripped-off or not.
This sounds like one of those scam deals where a developer builds crappy housing and finds a lender to give loans on it. The buildier works with the lender and appraisers to appraise it higher than it's worth to scam people into buying these places and getting bad mortgages to pay for it. I would contact the state AG office to report this.
Re: Re: anyone heard of Emigrant mortgage? Getting a less than perfect deal on financing is not proof of fraud. If you discover the appraisal was inflated and documents were forged to qualify the buyer, that's proof of fraud.
