Trying to refinance home for last 6 months, now mortgage broker says loan is dead. Ripped off? what can we do?

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In the middle of January my new husband and I began the process of refinancing our loan. We live in Maryland and we began working with a lender in our area. We paid for an appraiser to come (their recommended appraiser) for $ 350, as well as paid $ 200 for some fee that Bank of America charged. The mortgate broker came over to our house and we signed all of the necessary papers about our refinance. Over the next 5 months they have constantly asked us for paperwork that we have already submitted over and over again. Our W2 forms, our bank statements etc…they blamed the bank for losing this paperwork and so we have submitted these items multiple times. Also, they would always say “we’re pretty sure you’ll be closing this week” Today we received a call saying that our loan is dead, even though just last week the broker told us that he had received an extension on our closing and we should close within 5 days. He said our loan was dead because our appraisal was over 6 months old, which it is not. He said the title company can at anytime throw out the appraisal if it goes past 6 months. The broker is now saying he cannot get our money back, but if we recommend him to other people for their mortgage, and he makes money, he will give us our money back. He keeps on making up excuses on how my credit score is too low, even though before he said it was fine. He also said I would have to pay a $ 100 collection off of my credit report which I did immediately, and now he’s saying that’s a problem. It seems as though they have tried to make this go for as long as he could and now that there is nothing else to ask for, they are saying the loan is dead. What is going on, can we take legal action, what can we do!??!

signed,
FRUSTRATED

2 Comments
  1. Reply
    Meg D
    February 3, 2011 at 12:25 am

    It sounds bad. This mortgage broker is not good. There isn’t much you can do to take legal actions since there’ll be upfront legal fees, if you do that, you might lose more. The attorney might charge more than the broker. Don’t work with a broker, you have to go to the bank directly. If he was trying to refinance through BOA, go to them directly. Or contact your current mortgage company to work out a deal. Before you have any conversation with your loan servicer, prepare. Record your income and expenses, and calculate the equity in your home. To calculate the equity, estimate the market value less the balance of your first and any second mortgage or home equity loan. Here’s a good article on the process of working with your current lender.

  2. Reply
    acermill
    February 3, 2011 at 1:00 am

    This issue may not be the mortgage broker, but one from Bank of America instead. BoA is huge and has undergone drastic changes since the financial meltdown of last year. Underwriting guidelines are not fixed in stone. What may have been an acceptable credit situation a few months ago may no longer be acceptable. The title firm has nothing to do with the age of the appraisal. That is also a BoA requirement.

    When one applies for a mortgage of any kind, there is never a guarantee that it will be approved until it actually closes.

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