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Old 08-28-2013, 11:05 PM
 
19 posts, read 73,007 times
Reputation: 18

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Hi there

I originally obtained a pre-approval mortgage letter from Chase with a rate of 4.625%. I found a home I liked, and my offer was accepted and decided to go to TD bank and they gave me a better rate (3.719%). The guy at TD bank said I would not pay anything (other than the fee to pull your credit report) if the loan doesn't get approved. I signed a document that will guarantee the rate for up to 60 days but I was an idiot and did not pay attention to the section which states that there is a penalty fee of 0.5% of the loan amount. During the home inspection, extensive termite damage and several other problems were found which would cost a lot of money to repair. To make the story short, the purchase contract was cancelled. TD bank said, oh well, now you're liable to pay the rate lock cancellation fee which is $1400.

According to TD bank, the cancellation fee is not charged if:
a)my application is denied, or
b)choose to float the rate and the rate is locked by the bank before my application is "cleared to close"
c)I withdraw my application before:
i. I receive the good faith estimate, and
ii. I receive a truth in lending disclosure, and
iii. I sign the application loan disclosure.

I have not been charged any money yet but customer service says I will and there is nothing they can do about it and I have to deal directly with the branch where I filed the loan application. The guys at the branch are saying "we'll try our best to see if the fee can be waived" but I don't trust them anymore. I would like to point out that I did not sign the application loan disclosure, but I received the good faith estimate and truth in lending disclosure.

Based on the info provided, do they have the right to charge me the penalty fee even though, I didn't sign the application loan disclosure?

Thanks in advanced!
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Old 08-29-2013, 06:17 AM
 
Location: MID ATLANTIC
7,598 posts, read 17,614,249 times
Reputation: 8078
Something is not right. Go back to your TD loan officer and request clarification in writing or email regarding the .50% penalty.
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Old 08-29-2013, 11:56 AM
 
19 posts, read 73,007 times
Reputation: 18
Quote:
Originally Posted by SmartMoney View Post
Something is not right. Go back to your TD loan officer and request clarification in writing or email regarding the .50% penalty.
Thank you. I sent an email to the loan officer this morning and I'm waiting for a response. Thanks again!
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Old 08-30-2013, 02:43 PM
 
19 posts, read 73,007 times
Reputation: 18
Ok, here is an update. They got back to me and said that even if the application loan disclosure was not signed, it was still "viewed" by me. I received these docs online and by viewing the app loan disclosure, it indicated that I'm also aware of the fee. In addition, they won't be able to waive the fee even if the home failed inspection. Apparently, since I already signed the rate lock authorization form, there is no other way around it and I must pay the fee anyway.

Is there anything else I can do or I'm already screwed?

Last edited by msuhcpcrew; 08-30-2013 at 03:35 PM..
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Old 08-31-2013, 02:54 PM
 
3,317 posts, read 7,251,326 times
Reputation: 4095
What are they going to do if you don't pay it, make it a collection on your credit? I haven't seen a rule this tight in a long time. I would switch lenders and advise TD where they might place that fee. I would file a complaint against them, using buzzwords like "predatory." I would contact news agencies. I would not give them a penny.
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Old 08-31-2013, 08:01 PM
 
Location: MID ATLANTIC
7,598 posts, read 17,614,249 times
Reputation: 8078
https://help.consumerfinance.gov/app/mortgage/ask

wow, I've got two back to back posts with this link.
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Old 08-31-2013, 08:54 PM
 
19 posts, read 73,007 times
Reputation: 18
Quote:
Originally Posted by Pfhtex View Post
What are they going to do if you don't pay it, make it a collection on your credit? I haven't seen a rule this tight in a long time. I would switch lenders and advise TD where they might place that fee. I would file a complaint against them, using buzzwords like "predatory." I would contact news agencies. I would not give them a penny.
Thank you for the advise. I would hate to have a collection on my credit history, and I'm hoping this won't happen. The first thing I'm gonna do is to file a complaint against them.
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Old 08-31-2013, 09:05 PM
 
Location: NJ
17,579 posts, read 38,288,152 times
Reputation: 16098
I wonder how often the timing works like that. Where someone is locking a rate before inspection is over?
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Old 08-31-2013, 09:05 PM
 
19 posts, read 73,007 times
Reputation: 18
Quote:
Originally Posted by SmartMoney View Post
https://help.consumerfinance.gov/app/mortgage/ask

wow, I've got two back to back posts with this link.
Thanks for the link!
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