URGENT - Mtg Broker LIED

Financing, Hard Money Lenders, Private Money
1

Hi All,

Your help is very much appreciated. I am closing on an investment property out of state and received closing docs via Fed Ex today. I am supposed to sign and overnight back today, however when I received the docs they were materially different in what I was expecting.

Number 1 the fees paid to broker/lender were a lot higher than I expected, but I could potentially let that slide.

The real problem is that the loan is a pay option arm and the i was promised a 2% start rate and a 2.45% spread on the MTA. What I got was a 2.5% start rate and 3.45 spread. I dont really care about the start rate since I dont want neg am. I actually wanted a fixed rate mortgage and the broker sold me on the pay option arm because he told me my fully indexed rate would be 6.25%.

The problem is that I want to buy the house, the mortgage is not horrible and I’m a 665 so I’m not sure I can do better. The broker clearly put this as a second home and not an investment property so I’m thinking that if I go elsewhere I may not be able to do any better at all.

I’m trying to put aside my anger at the ethically reprehensible conduct of the broker and just focus on what makes the most sense regarding the investment at this point.

I want to buy the house and I do not think this mortgage is horrible, but I would much prefer to be in a fixed rate loan. Also this mortgage carries a pre payment penalty that I was not aware of. Is there anything I can do?

Thanks in advance for your comments/suggestions.

2

call the broker. I’m gotten docs several times that were done wrong. The loan broker does not normally review them prior to sending.

3

where’s the house located?

4

I would do what aak5454 said and call the broker. I have been an escrow officer for 4 years and I see things like this happen all the time. If the paper work that the broker sent you is “correct”, s/he can atleast explain to you the changes and maybe make you feel better.

5

Called the broker, he acted surprised and said he would look into it.

I have my reasons for thinking this is a bait & switch and not a mistake. We’ll see. In any event I’ve decided not to send the docs thereby delaying closing.

6

In my opiniion I would go with your gut instinct.You cannot conduct business with anyone whom you feel is misrepresenting themselves.Keep in mind that a mortgage is a very serious commitment and should be taken very seriously.

Freddy Escobar
Senior Loan Officer