I thought house was a good thing

I've never have seen that before, was anything said about how the documents had to be dated?

That's interesting as that may be more than the corrections agreements may allow.

 

Just out of curiosity, who was the lender?

 

The broker is a slimeball, or stupid, or both. They should be pretty much able to tell right off the bat what they can or can't do for you, and if they couldn't get you into the program they originally intended, they could have told you that WAY before you went to sign your docs.

Loan people (with some exceptions, the company I work for being one of them) are right below CAs in the food chain. That is one of the oldest tricks in the scumbag book -- get you right down to closing and then spring the bad news, trusting that you want the house badly enough to take a crappy loan. Can you say "bait and switch"?

Good for you for not biting! And better luck the next time you find a house you want.

If I may ask, did they give you any reason for the switch?

 

I've seen a higher interest rate switch but never a owe differant loan program switch. I had one a few weeks ago the broker could not get the rate the borrower was expecting and the documents never got sent.

 

No. That it how it works with unscrupulous brokers. I wonder if you can report this to your state consumer affairs dept. for any action from the state.

You don't say if you are also a first time home buyer. If so, there is another nasty bait-n-switch coming up. It is the escrow closing. This is when the escrow company pads the bills for the escrow with junk fees. They suprise you on the day of closing with all these extra things that you feel you have to agree to.

To minimize this, get a written estimate from the escrow company of the fees. In California, this is required. They will attempt to pad the bill. You have two choices... refuse to close escrow, or pay the fees.

If you chose to close escrow, then do so under protest. Then follow up with demands of refunds and proof of services for the fees they charge. For example, they will charge $50 for a copying fee. Demand to see the receipt and why it cost $50 to copy a document. Be prepared to sue them in small claims to recover some of the fees that they can not substantiate.

 

Your state may have some type of fair business practice laws. What state are you in?

 

This sounds like bait and switch to me.

Call your State's Dept of Banking and Finance they call give you more info. as to what the law is. If you can afford it, contact a Real Estate lawyer and see what they say. They may do a free intial consultation.

 

Parul

Without knowing the details of both loans it is impossible to give a completely accurate answer. But I can give you this much.

It may very well be that the lender is actually helping you with the 2nd. The monthly payments on a 15 yr. balloon/30 yr amortized loan will be lower than for a 20 yr. Let me give you a generic example.
Let us say that the loan amount is 30,000 and the interest rate is 13.5%. The monthly payment on the original loan would be 422.58 per month. On the new loan the payment will be 400.89 and the balloon payment in 15 years will be 30,877.93. Under this scenario your monthly would be lower and unless you are planning to stay with a sub-prime mortgage for the entire term, you will be refinancing within about 2-4 years anyway.

I don't know your entire situation and if you wish to, you can email me off-board with details and/or contact info and we can discuss it further. But, based upon what you have said so far, it doesn't sound as if the lender is trying to screw you as some have said.

BTW when are you supposed to move into the house?

Good luck and I hope this helps you.


fla-tan

 

If you are in Florida, this would be illegal. I think most other states have similar state laws, so you do need to get in touch with your state Banking and Finance people. If it is Florida, tell me what city and I will tell you who to call. But act quick, the Department was voted out of existence and is being closed. But, some functions will be transferred to another agency.

I agree that this is a business that has similar business ethics of a a collection agency. I dealt with a national builder (Pulte) and got my loans through them. They could not give me a closing figure until the actual closing. Then, all the documents are just thrown at you to sign. After waiting four hours at the title company, you just want to go home.

This is a little off topic, but I once talked with a con man who sold home improvements. His con was to get the people to sign a mortgage on the house securing the loan, and grossly overcharge them. He dealt primarily in neighborhoods where the houses were older, and dealt only with people who had a lot of equity. A $3,000 job would cost $40,000 or more.

Ever one of his hundreds of victims swore they never signed a mortgage on their home. In every case they did. I had the guy show me how he did it, and I have to admit it was a perfect scam. He said no one ever suspected they were signing a mortgage, and no one ever questioned him about it. It is the same thing you faced - new info thrown at you at closing.

There are honest people out there in the business, but you have to look. I was once in the business over 20 years ago, and the crooks got all the business. They lied to the customers and then intimidated the customers into closing the deal. I put all my evidence together, took it to the state Banking department, and never heard from them again. I got out of the business.

The best comparison is the credit card offer. You are approved for "up to $50,000" at a rate "as low as 2.9%". What you get is a $500 CL at 18.9%.

 

Is there a list anywhere or can you provide one of all the junk fees they may try. We are due to sit down with the title company in 14 days I hate surprises.

 

No that's called FRAUD.

Too bad you didn't get copies of the newer loan documents to compare to the older ones. If you did you'd have a great lawsuit.

Everything should be reversed, including any inquiries on your cr.

I know about this. It happens from unscrupulous Financial Planners all the time.

I make a GREAT living fixing this crap.

 

I guess I should have been more specific with my answer -- I wasn't referring to the new second, I was referring to the 2 year ARM on the first. I still say that if they couldn't get him what they originally told him (that does happen to everyone; an unforeseen problem crops up, the lender discontinues the program you were going to use, etc., sometimes there is nothing you can do about it), then they should have told him WAY BEFORE he went to sign his docs instead of springing it on him that way (were they perhaps hoping he wouldn't actually read what he was signing?). Even assuming that the new program for the second was a better one, why didn't they let him know of the change? IMHO, a broker has an obligation to tell the borrower what is real about the situation, explain the problems and what their options are, and then let the borrower decide what he wants to do.

This just happened to me yesterday. I told a borrower about a particular program that would help him accomplish his goals. It turned out that I had been given bad information by the lender's rep, and that program won't work for the borrower after all. Now I have to call him and tell him I was mistaken, and that we will try to come up with a different solution. I do not just submit his loan on a different program and let him find that out when he goes to sign his docs.

 

Yeppers, called "Full and Fair Disclosure", it has nothing to do with your opinion, it's the law.

 

Do some searching on the web. These finance companies, Household, Citi...., Associates, etc.; Some are being sued class action for predatory lending practices. Others are being investigated (to be sued class action) for predatory lending practices.

Check your documents very closely. You could find that your 2nd isn't a 2nd but a line of credit, and all you could be paying is interest.

These companies prey on people with low cash flow and older people. The older couple that I just purchased my home from had a 2nd with Household and they had to file bankruptcy. Their 2nd was for 140% more than the house was worth and all they paid each month was interest. The principal never went down.

These companies are bottom feeding scum!

Read every last letter of your documents.

Sirrowan

 

Here is a good site to read-up on mortgages, tips & brokers.

This is the sites table of Contents. Scroll through the list and click on the links for very good reading.

http://www.mtgprofessor.com/table_of_contents.htm


I am currently in the process of a home re-finance myself, and couldn't be happier with the broker I found on this site.

http://www.mtgprofessor.com/upfront_mortgage_brokers.htm