Posted on: 13th Jun, 2009 12:47 pm
I locked in a 4.75% 30 year fixed rate lock with Mortgage Capital Associates on 5/7/09. On 5/27, the loan officer, Tom Mercer, emailed me saying that underwriting was approved. On 6/8, he notified me that his investors were "suspending rate locks". He admitted they were breaking the contract but all he could offer was a 5 year ARM. I am not interested in an ARM. I told him that the minimum I would accept was a refund on the rate lock fee and the appraisal fee. I have not heard back as of 6/13. What are rate lock contracts and fees for if lenders can break them when the rate moves against them? Are there any regulators or government agencies that oversee loan service companies and how lenders behave ? I have filed a complaint with the LA BBB. What else can I do?
There is a form called the rate lock agreement form. Did you sign it? Did it have a rate on it? Finally, there is a section which indicates that you would like to lock in at this time. You need to check that section. Did you do that?
If it was all verbal, then I am afraid there may be no recourse.
If it was all verbal, then I am afraid there may be no recourse.
The lender is charging you to lock in your rate?!?! That does not seem to ethical. The unfortunate part of this is that rates have increase since 5/7 and even if you approached another lender with your loan, you may not be able to obtain this rate. I hope this helps...
I had the same thing happen. I did lock it in, in writing, through a broker. Does anyone have any idea what I can do? Apparently, the lender went out of business. Is there anything I can do from here?
If the lender went out of business, then there is nothing you can do.
James, it is possible that the fee was essentially their application fee. Or, some banks take an up front fee for a float down option.
James, it is possible that the fee was essentially their application fee. Or, some banks take an up front fee for a float down option.