Got it in writing, but it didn't matter... (loan, recourse, foreclosure)

[jackbelchos]

Hello,

My husband and I just closed on a new house. We went through a mortgage broker that was recommended to us through a commercial broker who is a friend of a friend. I got three GFEs in all, two from banks, and one from the broker we used.

One of the banks came in with lower closing costs than the broker, so I emailed the broker, told him that I'd like to use him since he came highly recommended, mentioned the other estimate, and asked if he could beat their costs. He offered (in writing) to deduct the processing and administration fees, which came to $600. I accepted, and began the process.

Fast forward to our closing 30 days later. The night before we went to title, we received an estimate of our closing costs from the title company. Not only did the broker charge us for the administration and processing fees, but it was $800 instead of $600! He also failed to disclose a "discount fee" that the bank had added on. I forwarded him the email he had sent to me promising the discount in fees, with no response. I finally got ahold of him, and asked what was going on. He said that the loan turned out to be more difficult than he had thought it would be when he agreed to the discount, and gave some excuses that he had told my husband all along what was happening and that he had additional reports and things he had to pay for, and that he "has to eat" and "has to pay [his] staff". My husband knew nothing of this, and most of our interaction was done through email so I would have a record of it. Not once did he tell us that he wouldn't be able to honor what he promised.

At this point we were stuck, and he knew it. The house was a short sale, and had just gone into "pre" foreclosure. It was scheduled to go into foreclosure the week we closed. We had waited for four months for the bank to okay the sale, got an amazing price for the house, and would have lost it if we had to start the loan process all over again with someone else. We had to scramble to come up with the additional $1400 for the broker fees as well as the discount point we were unaware of.

Everyone says to "get it in writing," which I did. However, what's the recourse when you do have it in writing, and the broker still reneges on his promises? I do plan on talking to the broker who referred me, and letting her know that the "most honest broker she [knew]" was anything but. I'd like to file complaints against this guy, but don't know where to start. Does anyone have any advice? Thank you.

[texdav]

Bascially IMO when you agree to teh cahnges you agred to change the contract. if not you would ahve been injuied and could have filed suit on the written contract.

[venk25]

Not an answer to OP's question - but sharing a similar experience.

I and my wife are in the process of closing a home and have been working with a broker. Then came Wells Fargo and offered a better deal. I told the borker that we got a better deal and the immediate response, without much hesitatation, was that they'd match/beat *any* offer we got. It did sound strongly like the brokers were willing to do anything to get us to the closing table - at which point we're stuck and we'd most likely pay whatever "extras" we're hit with, to get it over with. We are going with Wells Fargo - hope we are not in for a surprise at the closing table.

[VictorBurek]

Just as easy to run into this problem with a direct bank than with a broker. Bad apples are everywhere.

[Synergy1]

You are so right Victor because we never would have believed our broker would have duped us and he did...1/4 point duped and another appraisal.... or.........start over again......

We went with the broker but never again and paid the price on the day of closing