Why doesn't Provident Lending want my business?
June 9, 2009 1:35 PM   Subscribe

I am in the process of refinancing the mortgage on my home. My lender wants to blow up the deal at the last minute. 1) Why? 2) What are my options?

Went all the way through the process. Signed closing papers on Friday. 30-day lock expires today. Lender informed us today that one of the (many, many, many) signed pages of paperwork has an extra penstroke on the date line. My hand got tired from all the signing and it slipped, put an extra stroke on one of the numbers (for the date). They are asserting that this looks like the date has been crossed out and changed, and thus voids the close.

Question #1: why are they doing this? Rates have gone up in the last month, so breaking the deal is going to cost me money, but what is in it for them? Obviously I won't be going back to the same firm if this process has to start again.

Question #2: do I have any recourse? I have no idea how mortgages work, of course, but in the abstract it seems like there might be some protection from bad lenders, or at least some regulators with an interest in knowing about bad business behavior.

The company is Provident Lending, for whatever that is worth.
posted by genug to Law & Government (12 answers total) 1 user marked this as a favorite
Best answer: Rates have gone up in the last month, so breaking the deal is going to cost me money, but what is in it for them?

Exactly... the bank or whoever is actually funding the loan doesn't want to honor the locked rate now that rates have spiked. You're not the only one watching the crazy rate action the last two weeks. The broker probably got the word to try and void as many of the apps as possible, so they are citing this horrible reason of the extra pen stroke. Surely that could be amended with your initials.

No idea about recourse. Best of luck.
posted by fatllama at 1:47 PM on June 9, 2009

No way. They are just trying to scare you and hoping you don't question them. Tell them you expect them to follow through on their contractual obligations-- basically, call their bluff. If they continue to insist, a strongly worded letter from an attorney should do the trick. Give the paperwork to the attorney (you have the originals or certified copies, right?) and have her write the letter. Shouldn't take too many hours (lawyers bill by the hour, generally) if it really is as simple as you say.

Of course, if they really think that much money is on the line they might dig in their heels and then the lawyer will cost that much more . . .

This is not legal advice, I have no idea what the legal rights involved here are, etc.
posted by ohio at 1:58 PM on June 9, 2009 [2 favorites]

They want your business, sure, but at 1+% higher interest rate for the next 20 (or however many) years. That's a lot of money for them, and they are willing to be unscrupulous to get it.

You probably would benefit from the advice of an attorney experienced in mortgages, since No one here Is Your Attorney.

And report the creeps to your state's Attorney General, at least, if the deal falls through because of this.
posted by aught at 2:00 PM on June 9, 2009

Not legal advice either but we had a somewhat similar situation when we refinanced our mortgage about 15 years ago (when interest rates were going down just like now). The mortgage broker tried to tell us that the interest rate we were promised was no longer available and we were offered a higher interest rate - this was after most (if not all) the paperwork had been signed and we were nearly ready for a closing. Mr. Bluesky went somewhat postal on the mortgage guy, threatened to lawyer up, report him to whatever regulatory agency there was. Mortgage guy backed down and we got the interest rate we promised. I don't know quite how this works but a higher mortgage rate must've meant something for Mortgage guy.
posted by bluesky43 at 2:12 PM on June 9, 2009

Wait, you've already had the closing? Not sure what state your located, but this sounds like complete bullsh** to me.

Get a lawyer, pay him a couple of hundred bucks and have him tear the lender a new one.
posted by lootie777 at 2:46 PM on June 9, 2009

Woodward and Bernstein answer. Follow the money. They can make more money lending to someone else for a higher rate. That simple. This is worth a decent amount of money over the course of the loan. Fight.
posted by JohnnyGunn at 3:10 PM on June 9, 2009

I think a strongly worded letter from an attorney will do the trick. Sure, it might cost a couple hundred bucks to retain a lawyer, but if it keeps you at the lower rate your preserving tens of thousands of dollars in savings over thirty years.

IANAL, but...

The thing about the contract is that the signatures are done at a closing, near simultaneously, yes? So if they witnessed you signing it and AT THE TIME brought up no complaint, I don't believe they can easily declare the contract null and void.

Also, I want to point out that this sounds like a GREAT post for Consumerist.
posted by HabeasCorpus at 5:11 PM on June 9, 2009

It might also be helpful to relate this story to consumerist.com. They have a way of publicizing crappy behavior like this that makes companies rethink the way they treat their customers.

(of course, it may have the opposite effect, I'm just putting it out there)
on preview, I was beaten to the punch by HabeasCorpus
posted by pkphy39 at 5:11 PM on June 9, 2009

I would call a Real Estate lawyer and ask if this is legal. I would make sure that Provident Lending was clear that if this deal doesn't close, I will expect a refund of fees, including appraisal, due to their negligence in not correcting the error when it happened. I would make sure that Provident Lending was clear that if this deal doesn't close, I will not use them for financing. Lawyer up. Useful to have a lawyer review real estate documentation, in any case. And Consumerist is a good idea.
posted by theora55 at 5:36 PM on June 9, 2009

You are in the stronger position here, even if it doesn't feel that way. I would bite the bullet and have a lawyer draft a letter on your behalf immediately, even if it costs you a couple hundred dollars.

Contracts are generally not voided for simple mistakes like this. As long as intent was there by both parties, and there is not anything obvious to the contrary - say a date crossed out, initialed, and changed - the agreement is most likely solid. IANAL.
posted by shinynewnick at 7:15 PM on June 9, 2009

Response by poster: Thanks to everyone for the suggestions. I had rashly assumed that banks didn't carry the risk of interest rate changes over a refi lock period (via insuring themselves in some fashion), but their behavior (and your comments) certainly argue persuasively for the contrary.

Next stop is a lawyer, and/or consumerist. Thanks again.
posted by genug at 1:40 PM on June 10, 2009

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