Financing in Indianapolis>Question Details

bugsy100, Home Owner in Indianapolis, IN

Problems with a mortgage broker

Asked by bugsy100, Indianapolis, IN Thu May 24, 2012

I am now over 3 months into refinancing a rental home. Excellent credit, great job, should be a slam dunk loan. The broker initially told me he could get the loan as a "second home" rather than "investment". After the rate was locked as a "second home", underwriting is saying no. Now, my rate is apparently changing for the 3rd time. Again, 3 months into the deal, and he's "seeing what he can do for me". I feel I deserve something for my anguish and time wasted. What recourse do I have other than walking away from the closing table next week (something I don't really want to do because I think I'm finally at the finish line and I need the money out of the refinance). Advice?

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bugsy100’s answer
I am really upset over the moving target. I was initially locked in on a 5/1 ARM at 3%......but he didn't tell me about the 1.625 points I was paying to get that rate. So, we relocked at a 4.25% 30 year par loan......both times as second homes. Now I am being told that I've got to lock in AGAIN (probably at 4.75%) as an investment property. I'm not as upset by that as much as I am the customer service that I have gotten (3 months with never-ending target dates), and the fact that he knew it was an investment property and told me it was OK to do it as a second home. I'm glad to get that part straight before going to jail, but he has given me bad advice, bad customer service, and thus far, no results. Is it fair for me to ask for a cut on their fees? They are actually a reputable firm in this market. I am tempted to take my frustrations to his boss. Am I being unreasonable?
0 votes Thank Flag Link Thu May 24, 2012
Transfering your file should be an esay process, just have the current broker provide a copy. The set up process should take only a day or two? As for the apraisal a new lender will require a new appraisal and will probably not accept a transfer. Now that your file is with the Branch President let's hope he resolves the issues and close's your loan.
0 votes Thank Flag Link Thu May 31, 2012
Thanks for your responses. The file is currently in the hands of the Branch President, who is hopefully rectifying the issues. Just so that I understand, should things go south from here, I can have the file (bank statements, applications, earnings statements, etc) simply transferred to another lender? Would the appraisal transfer as well? Clearly, I don't want to go through the "loan setup process" again, as this seems to take at least 30 days. However, since I am now in the 4th month of this loan, I may not have much to lose if a "transfer" is that simple. Again, I have a credit score north of 775 and good income. Should be no problems with this loan.
0 votes Thank Flag Link Thu May 31, 2012
Sorry to hear about your troubles. Your best bet is to have your file transfered to another lender. Preferably a direct lender. Doesn't sound as if this broker can find a lender to take your file indirectly. Also, if not already, you may be eligible and should consider trying to do a HARP2 refi. Cost is considerably less than traditional refi, its available for investment properties, and if your score and assets are high enough, and your LTV doesn't exceed 125%, you may not need to do an appraisal.
0 votes Thank Flag Link Wed May 30, 2012
I'm sorry for the issues you've been facing. I have no advice as far as receiving a monetary restitution for the time, energy and anquish you've faced throughout this process. This is what I do know - if these problems continue, you could request your entire file to transfer to a new lender. This will normally help expedite the process and saves you some time when submitting a new application for financing. Rates are still extremely low if you did choose to pursue this route. At the very least, you could speak with a superior and alert him/her of this circumstance to prevent this individual from encouraging other parties into falsification of their loan application. I wish you the best of luck and hope this will all be behind you here soon. If not, I have several recommendations of loan officers with experience and professionalism that would be more than happy to assist you.

Mallorie Wilson
Associate Broker
Century 21 Diversified
malloriewilson.com
317-590-3434 direct
317-585-7748 office
317-845-7726 fax
0 votes Thank Flag Link Wed May 30, 2012
I am not a lawyer and this is not legal advice, but it's not mortgage fraud unless it closes. If it's now properly disclosed as an investment property then no crime has been committed.

What you have is a case of an unethical loan officer that will do anything to get your business. You probably had offers from others that properly quoted it as an investment property but you went with the lowest. This is textbook bait and switch and a prime example of why the unethical still exist in our industry. They hook you with the notion that you will be able to save a few bucks then change it up when they think it's too late for you to switch. Closing with this lender will reward this behavior.

I don't lend in IN so it's not a pitch for your business, but I would definitely investigate other opportunities with more scrupulous lenders in your area.

Just my opinion.
0 votes Thank Flag Link Thu May 24, 2012
After reviewing the comments here, I started looking on the internet for articles about mortgage fraud. Essentially, I was encouraged to commit fraud regarding the "second home" vs. "investment" property. My loan application was filled out as a "second home" at his recommendation......of course I signed that application. A few weeks ago, I voiced my concerns about it to my broker, who told me not to worry about it. I truly didn't know that I was commiting fraud, but I do now. I am so angry with him that I want to expose the situation, but I don't want to get into trouble myself. Is this a situation where I just let it go, close the loan and move on.......or do I pursue the fraud issue at the risk of getting myself into trouble?
0 votes Thank Flag Link Thu May 24, 2012
I can refer you to a local, reputable and honest mortgage broker. The best in the business as far as I'm concerned.

Good luck!

Joe Shoemaker
Principal Broker, REALTOR®
MacDuff Realty Group, LLC
317 413.8501
joe@joeshoe.com
http://www.facebook.com/joeshoe
http://twitter.com/#!/jojosmojo
0 votes Thank Flag Link Thu May 24, 2012
Rates have dropped significantly so it would not hurt to get another opinion, especially if you are displeased with your loan officer. I don't know all the details but 4.75% sounds high even for an investment property.
Web Reference: http://WeFixRates.Com
0 votes Thank Flag Link Thu May 24, 2012
Talk with the owner or manager he should be unhappy to hear you were promised second home loan pricing on a true investment property by one of his loan oficers. Had you been given the corrrect pricing up front you may have made differnt decisions and not feel boxed into a corner. As for a cut in cost you can always ask, but ask the boss. Make your frustrations know it is the only way things can change.
0 votes Thank Flag Link Thu May 24, 2012
I think I see at least one violation of RESPA here.
You should have been given a copy of the GFE; Good Faith Estimate,
which details all the numbers, fees and charges, and breaks down the Interest Rate and APR, Annual Percentage Rate.
You might bounce this off him.

Good luck and may God bless
0 votes Thank Flag Link Thu May 24, 2012
Agree with Carl. You know that it's an investment property and if you sign on the dotted line, you are the one that will be wearing the orange jump suit. If it's now being done as an investment property, go ahead and close. If it says second home then you better pull the plug.
Web Reference: http://HarpSupport.Com
0 votes Thank Flag Link Thu May 24, 2012
The mortgage broker encouraged you to commit mortgage fraud......refinancing an investment as a second home. Good catch by the underwriter! If it is an investment property refinance it as such and pay the price. Close your transaction, move on and be happy you were caught by the underwriter and not the investigator.
0 votes Thank Flag Link Thu May 24, 2012
Hang in there! Loans are the toughest part of real estate. If you are this far into it, I would hang in there and go through with it. Starting over is not the answer.
0 votes Thank Flag Link Thu May 24, 2012
I would call Chris Minor for some mortgage advice. He is with Great Western. His number is:317.563.1122.
0 votes Thank Flag Link Thu May 24, 2012
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