Float Down to better rate (loan officer, recourse, fees, refinancing)

[Stuart1126]

We have recently purchased a home. When we closed, the lender said we would be eligible for a float down rate within a year. The rates have fallen, and we have attempted to contact them asking for the float down. They ignore us. Should we consult an attorney? Do we have any recourse options?

Thanks

[helppls]

Wow, this is the first I've heard about a rate-float AFTER a mortgage has been executed. I am not an expert but I'm interested in hearing the comments.

I'm shopping for a mortgage right now and I'm having a VERY hard enough time getting loan officers to acknowledge a rate-renegotiaton policy. Most give a very generic, its at their discretion. There is one loan officer that I've been emailing for daily updates. He flat-out is ignoring this question when he types me daily rates to me. I could have sworn last week, he said they offered one free float-down but this was over the phone ... I think he does not want it on record. It is a sneaky way of doing business, imo.

[Kootr]

Originally Posted by Stuart1126

We have recently purchased a home. When we closed, the lender said we would be eligible for a float down rate within a year. The rates have fallen, and we have attempted to contact them asking for the float down. They ignore us. Should we consult an attorney? Do we have any recourse options?

Thanks

Does your contract with the lender state that you have a float down rate provision, and if so for how long, e.g. one year from closing date? Did you pay more (in points) to the lender to be eligible for a float down? If your answer to these questions are "no", then I'd say you are not eligible for a float down.

Maybe you were told early on in discussions of applying for a loan that you were eligible for a float down rate, but unless you requested it and paid extra in points, it's highly doubtful you have it as part of your contract with the lender.

I'm surprised your lender is ignoring you when you ask about this. They should pull your paperwork and advise you if you do, or do not, have a float down provision in your contract.

[renriq02]

If you have nothing in writing then you have nothing....

Sorry.

[chet everett]

Originally Posted by Stuart1126

We have recently purchased a home. When we closed, the lender said we would be eligible for a float down rate within a year. The rates have fallen, and we have attempted to contact them asking for the float down. They ignore us. Should we consult an attorney? Do we have any recourse options?

Thanks

The "marketing pitch" almost certainly was not backed up with anything in writing. I really doubt there is anything that can be done, just chalk this up and 'live and learn'.

Rates are dropping, find another lender.

[Stuart1126]

I cannot find it in my paperwork, though I havent looked very hard. I think the loan officer and lender both KNOW I'm eligible for it, though it's obviously not in their best interest to initiate a float down. I imagine they have been told to ignore these requests in the current financial situation and borrowers will just forget. I will spend a large amount of my time proving them wrong.

So can I just shop my loan around to other lenders? Will I pay fees?

[renriq02]

If you dont have it in writing then it's going to be hard to prove anything.

Refinancing will involve costs that can be 3-4% of the loan amount.

Originally Posted by Stuart1126

I cannot find it in my paperwork, though I havent looked very hard. I think the loan officer and lender both KNOW I'm eligible for it, though it's obviously not in their best interest to initiate a float down. I imagine they have been told to ignore these requests in the current financial situation and borrowers will just forget. I will spend a large amount of my time proving them wrong.

So can I just shop my loan around to other lenders? Will I pay fees?

[SmartMoney]

Yep, start shopping for a refi with other lenders and in the same breath, contact other recent home buyers and see if you have a common denominator, same builder, same loan officer. I would say a party of three with the same story is worth a letter from an attorney. It's not going to get you millions, heck, probably nothing. But it's unethical and both need to be history.

And then, it just may get you some kind of concession or assistance with that refi, but don't hold your breath. But do attempt to hold their feet to the fire. If you heard them correctly, they influenced you unfairly.

[Stuart1126]

Just heard that I can streamline to 5.5% from 6.5%. I can also float it for as long as I want and if rates drop again I can lock. I am eligible for a float down for the entire life of the loan. I guess underwriters are inundated with refi's and thats why it took so long.

[renriq02]

i had a streamline that was 6.5% to 5.5%

U/W denied it because it was a small loan and there was no benefit (according to the underwriter)

rates dropped to 5% and I told them it's a good thing the U/W denied it!

Originally Posted by Stuart1126

Just heard that I can streamline to 5.5% from 6.5%. I can also float it for as long as I want and if rates drop again I can lock. I am eligible for a float down for the entire life of the loan. I guess underwriters are inundated with refi's and thats why it took so long.