We thought we had locked in at a certain fixed rate with our lender, we verbally confirmed with him that we wanted to lock in. A mistake was made on the lenders end and now our rate will be .5% higher if we want to continue with a fixed rate. Has anyone had a similar situation, what was the ending result? Our closing date has been move and we have more time to think about what we want to do and have an opportunity to fix the situation. What’s the best way to approach fixing this?
Mistake? Yeah, right – the mistake was that they didn’t think rates would go up. I’ve had something like this happen. If the lender locks the rate and then rates go up a lot, they may start using any number of tactics to get out of the lock. Even if they can’t get out of the lock, they are under no obligation to give you the loan, they can pretty much cancel it just because they want to. The lock gives you some comfort but there are no guarantees, thats the way the business is run, sorry.
Interest rate different than quoted for mortgage?
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Nothing is locked until it is in writing. If you have it in writing, they must honor it. If not, you pay the add’l 50 bps. Search all the emails or any oter documentation to see if you have a case.
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this is common and is how the world of ARMs
took down thousands of borrowers.
If you can EASILY handle the increase,
stick with it–if not, stop the deal NOW!
sorry that some lenders/brokers
cannot keep their ethics up.
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RE broker
We are going through a similar altercation!
Had you apid the fees for the mortgage product? These must have been paid to fix the rate.
In the credit crunch though it does seem that any excuse to change the rate is used.
If you had purchased the product and it is the smae proerty then by rights you should keep the proposed rate, in the illustration you would have been given. Hope this helps. Also make sure you complete before expiration of the product!
PS. A verbal agreement or WORD sadly seems to mean nothing these days!
stella
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personal experience!
Mistake? Yeah, right – the mistake was that they didn’t think rates would go up. I’ve had something like this happen. If the lender locks the rate and then rates go up a lot, they may start using any number of tactics to get out of the lock. Even if they can’t get out of the lock, they are under no obligation to give you the loan, they can pretty much cancel it just because they want to. The lock gives you some comfort but there are no guarantees, thats the way the business is run, sorry.
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i work for a mortgage company and nothing is set until you see the lock in confirmation.. and the reason for the rate being different is not the lender’s fault it is the loan officer who raised it up to make more money on the deal, you would not believe how many times i have heard greedy loan offiers not looking out for the best interest of the customers but only caring on how much money they are making.. this is the reason why the housing bullshit is going on.
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I am actually a loan officer with one of the leading banks in the country and unfortunately it sounds like you were working with a broker and to be honest this happens a lot in that line of the business. They tell you one thing and then right before closing they pull something like this. More then likely they could eat the difference on their end (cut their commission) and get you the rate you thought you were getting in the first place. BUT they won’t because at this point they think they have you. They think you don’t have enough time to run and get another loan in enough time to still close on the home.
If I were you I would go speak to another lender and make your current lender aware of that fact. You might just see a sudden change and that they would be more then happy to get the rate back down some. Just remember they are trying to make the most money they can off your loan and to do that they have to get you the highest rate they can so the out side lender will pay them top dollar for the loan. In fact to be honest I would go to a local bank as the rates will more then likely be competitive because they aren’t planning on selling your loan (if it is a large bank most keep their mortgages in house and therefore aren’t trying to jack the rate up because they don’t plan on selling it, you’ve just cut the middle man out). Hope this helps!!
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