Financing in 66062>Question Details

Eanderso22304, Home Buyer in 66062

Am I getting cheated by a lender for an FHA streamline refinance?

Asked by Eanderso22304, 66062 Thu Jun 18, 2009

About a month ago I talked to a lender in Kansas about an FHA streamline refinance for 5%, 30 year fixed. I applied and all that, and was told I would close at the end of June. I just got a call yesterday saying that my rate was now 5.25% because he didn't lock the rate in right away because he was afraid we might not close in time and the rate would expire. Does this sound like a load of BS to anyone? I've owned 4 houses and refinanced once before and every time I agree with a lender to go forward, I get locked in at that rate immediately because that's what the paperwork I sign says. Am I missing something?

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Hello E,

Every lender has different guidelines about when and how rates are locked. With the numerous changes taking place in the mortgage industry now, banks are scrambling to adapt their guidelines to cover the increased risk in the marketplace. Many direct lenders no longer allow locking of loans until packages are submitted to opening or underwriting, and some won't lock until after a clear-to-close has been given.

Here's the thing- what he should have done was lock the loan at the time and then pay for an extension (generally a .25 point cost) and notified you of what was happening. Most of the time (not all) when this happens it's not because of lock expiration issues, it's because the lender either can't get the rate quoted or a shorter lock time was paying them more on the back end.

If you signed RESPAs, they serve no purpose beyond recording for the lender that you understand the terms of the mortgage. It does not serve as a contract. Until you sign at closing the loan is not binding, and even then there's the right of review period.

Your L.O. should have notified you that he wasn't locking your loan at the time. Unfortunately there's not much more you can do about it. Try speaking with a supervisor and explaining the situation. Let them know in no uncertain terms that you plan on contacting the attorney general and the BBB if they are unwilling to deliver what they promised. There's no legal repercussions to what happened, but it may be enough to light a fire under them. Good luck!

Kind regards,

Jason Diperstein
E Mortgage Management
800.793.9633 ext. 156
jdiperstein@emmloans.com
0 votes Thank Flag Link Fri Jun 19, 2009
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