Posted by Melody on 6/16/05 12:04am
Msg #45022

LOs who lie to borrowers - a small rant

I have one loan EVERY week that cancels mid-signing.

The usual reasons:
1. Higher interest rate than quoted.
2. LO surprises borrower with prepayment restrictions involving stiff penalties.

Tonight's loan had a 3 year prepayment penalty condition that would have cost the borrower $10,000. She had told the LO up front that she was selling the house next May when her son graduated from high school.

I live in a rural area. Most signings involve a 45+ minute drive each way.

To add salt to the wound: eDocs are usually involved.

Grrrrrrrrrrr

Reply by Sylvia_FL on 6/16/05 7:30am
Msg #45078

I had one of those yesterday. Was for a company who have high interest loans.
Get the package, check included as this company always sends a check with the package. (sidetrack here - when I got the confirmation, it stated if loan did not close I would only get half my fee - yet they send the check with the package for the whole fee)
So, didn't get a phone number for borrower but phone number for broker, so call broker to get borrowers phone number - and company had even given me wrong number for broker, so had to call company to get correct phone number - they didn't have borrowers number only the brokers). Broker gives me number and says borrower is upset as they are not getting as much cash out as they wanted, but one of their payoffs was a lot higher than they had been told (that payoff was an Ameriquest prepayment penalty!!).
I asked broker has it been straightened out and would the borrowers be signing. He said yes, everything was fine. Borrowers are upset but they need the money so they would be signing.

Get to borrowers. They look at the settlement statement, don't like the high closing costs (over $8,000) and wife says she doesn't see the interest rate. I tell her the interest rate is on the Note. She says "it better be 7% fixed for 30 years". I look at the Note and show her it is an adjustable rate and the initial rate is 10.999% and it changes each July.
She got on the phone to the broker, and was screaming at him that it was supposed to be 7% fixed for 30 years and the papers say it is 10.999% and adjustable. She tells him there is no way they are signing these papers, they only wanted the money to put in a pool and they can live without that.
She tells me that she is reporting him to the state for predatory lending, that he is a shyster etc etc etc.

How these LO's expect to be able to tell a borrower that they are getting a 7% fixed rate for 30 years and try to have them sign a 10.999% adjustable rate I will never know.
Well, they put the full fee in the package!!! I was there long enough to earn it.

Reply by Dogmonger, Ca on 6/16/05 8:39am
Msg #45089

Had a borrower on a no sign last week that was offered the

same bait and switch. After at least forty minutes of hounding by the loan officer, his boss, her boss, this plucky lady finally tells the big cheese. If you went to the Ford dealership, paid for a new Ford, and when you went to pick it up, they tried to pass off a used Chevy as a new Ford, would you take delivery. The big cheese was speechless, and the plucky little lady made her point. Priceless:-)

Reply by Nancy in Florida on 6/16/05 9:10am
Msg #45095

Re: Had a borrower on a no sign last week that was offered the

Bottom line the LO's don't care. They are banking on the fact that the Borrowers are desparate and need the money to get out of debt or whatever and they also think if it blows up at closing they can smooth it over. I had one in which it did work, the LO lied about everything, rate, PPP, closing costs etc. The borrower refused to signed I was about to leave and the LO called (borrower had L/M for him) and the LO was able to convince this guy to continue. He told him that if he took the loan that he (the LO) was going to be able to then change his credit score from 620 to 720. It doesn't amaze me what some of these LO's will say to get them to sign but it does amaze me what some borrowers will believe.

Reply by Sonkat/NJ on 6/16/05 11:46am
Msg #45164

Re: Had a borrower on a no sign last week that was offered the

I am always dismayed when a loan officer/mortgage broker is involved. These people are the lowest of human beings (in my experience)- they lie, lie, lie. They are predators. They con borrowers into believing they have a personal relationship with them. They tell them they will redo the loan in six months for a lower rate. Needless to say, they get yet another fee.

Reply by jojo_MN on 6/16/05 12:21pm
Msg #45186

Does the prepayment apply if the house is sold? Most don't.

Reply by Terri_CA on 6/16/05 9:04pm
Msg #45360

I have only seen a few ppp clauses where it specifically states if the home is sold to a bonafide 3rd party will the ppp be waived, otherwise the ppp is in full force and effect for the term stated.

FWIW - I used to be a Payoff Supervisor at a nationwide reputable Mortgage Company, read those clauses until my eyes crossed! Some pretty upset borrowers who were "informed" by LO's that told them don't worry about it or they out right lied that there wasn't any ppp.


Terri
Lancaster, CA

Reply by Joan-OH on 6/16/05 10:30pm
Msg #45390

I love the Ameriquests where the fees are soooo high and you show up with a 2/28. As soon as you say it's adjustable, the borrowers gasp "He told us it was fixed!" Call the LO and he says, Oh, we'll refinance at a better rate @ 2 years when it goes adjustable and I'll waive all the fees.

I have heard this line over & over & over again. Has ANYONE here done an Ameriquest with no fees yet? I sure haven't. Where are all these refinances where the fees are waived?

There is a reason I don't do Ameriquests anymore.

Joan-OH