Is this predatory lending? If so, what can I do about it?
May 26, 2011 5:24 PM Subscribe
Is this predatory lending? If so, what can I do about it?
First, I know YANAL. Second, we have excellent credit, have never been late on a mortgage payment and are trying to re-fi our 6% 30-year primary residence mortgage at 15 years for a lower interest rate and roll in a home equity loan with the goal of reducing the interest rate and eliminating the 2nd payment.
We attempted a re-fi with the bank in town, offering a 2.8% rate. We were very upfront about not being able to come up with more than $1000 cash to close. The loan officer told me in his office that we were locking the rate that day. After completing all the paperwork as well as the appraisal, we waited. Three weeks later the loan officer called and suggested we lock in the 3.2% rate (with .75 point) before they went any higher. He hadn't bothered to lock it in. We were't happy about this, but it was still a better than we currently had so we proceeded.
However, after the appraisal came back, because of the .75 point, and the LTV, the deal would require more cash than we had to close. So we backed out.
Not long after we received a call from our current mortgage company, Wells Fargo, who somehow knew we were trying to refinance, I'm guessing b/c I had made a request for the payoff amount. I told him what I needed our monthly payment to be and stressed that we could only bring $1000 cash to closing. No problem! He offered a rate of $3.875 with two points. He assured me the monthly payment would be where we needed it to be and told me they could roll all but $1000 into the loan.
I also told him that we had an appraisal from the previous re-fi attempt and he said they could probably use that. The other bank agreed to release it to us if I paid half the cost, which I did.
When we received the GFI, the cash due at closing was thousands of dollars over the $1000 we told him we could pay. I immediately emailed him and told him we weren't going to be able to do that. He assured me that that was just a "worst case scenario" and said it would all work out in the end.
A couple weeks later I received a call saying that they weren't going to be able to use our previous appraisal (from two months ago) and we were going to have to pay $400 for a new one. Determined to get this done, we paid it.
Then we got a call saying that based on the original estimate of our LTV, we were going to either need more cash at closing or agree to a higher interest rate. Extremely frustrated and angry at this point, still we labored on because it was still a better deal than we currently had and we would still save tens of thousands of dollars over the life of the loan.
Then a few days ago we got a call saying their appraiser had valued the house nearly 10% less than the other appraiser. Because of this, there was no way we were going to be able to bundle the home equity loan with the primary mortgage. At that point he tried to sell me separate loans for both of them.
Now we're left with no refinance and having paid for two appraisals.
I'm willing to give the benefit of the doubt to the first bank because I know my neighbor refinanced with them without incident. But the constant, repetitive bait and switch with Wells Fargo has my blood boiling, especially considering they have held my mortgage since 1999 and I have been a perfect customer.
So..........do I have any recourse?
First, I know YANAL. Second, we have excellent credit, have never been late on a mortgage payment and are trying to re-fi our 6% 30-year primary residence mortgage at 15 years for a lower interest rate and roll in a home equity loan with the goal of reducing the interest rate and eliminating the 2nd payment.
We attempted a re-fi with the bank in town, offering a 2.8% rate. We were very upfront about not being able to come up with more than $1000 cash to close. The loan officer told me in his office that we were locking the rate that day. After completing all the paperwork as well as the appraisal, we waited. Three weeks later the loan officer called and suggested we lock in the 3.2% rate (with .75 point) before they went any higher. He hadn't bothered to lock it in. We were't happy about this, but it was still a better than we currently had so we proceeded.
However, after the appraisal came back, because of the .75 point, and the LTV, the deal would require more cash than we had to close. So we backed out.
Not long after we received a call from our current mortgage company, Wells Fargo, who somehow knew we were trying to refinance, I'm guessing b/c I had made a request for the payoff amount. I told him what I needed our monthly payment to be and stressed that we could only bring $1000 cash to closing. No problem! He offered a rate of $3.875 with two points. He assured me the monthly payment would be where we needed it to be and told me they could roll all but $1000 into the loan.
I also told him that we had an appraisal from the previous re-fi attempt and he said they could probably use that. The other bank agreed to release it to us if I paid half the cost, which I did.
When we received the GFI, the cash due at closing was thousands of dollars over the $1000 we told him we could pay. I immediately emailed him and told him we weren't going to be able to do that. He assured me that that was just a "worst case scenario" and said it would all work out in the end.
A couple weeks later I received a call saying that they weren't going to be able to use our previous appraisal (from two months ago) and we were going to have to pay $400 for a new one. Determined to get this done, we paid it.
Then we got a call saying that based on the original estimate of our LTV, we were going to either need more cash at closing or agree to a higher interest rate. Extremely frustrated and angry at this point, still we labored on because it was still a better deal than we currently had and we would still save tens of thousands of dollars over the life of the loan.
Then a few days ago we got a call saying their appraiser had valued the house nearly 10% less than the other appraiser. Because of this, there was no way we were going to be able to bundle the home equity loan with the primary mortgage. At that point he tried to sell me separate loans for both of them.
Now we're left with no refinance and having paid for two appraisals.
I'm willing to give the benefit of the doubt to the first bank because I know my neighbor refinanced with them without incident. But the constant, repetitive bait and switch with Wells Fargo has my blood boiling, especially considering they have held my mortgage since 1999 and I have been a perfect customer.
So..........do I have any recourse?
No.
Predatory lending is not a legally defined term, nor is it a crime, nor is it a violation of any civil law. As such, unless the bank violated any agreement that you had with them, you have no resource, as the bank has not wronged you.
posted by saeculorum at 6:27 PM on May 26, 2011 [1 favorite]
Predatory lending is not a legally defined term, nor is it a crime, nor is it a violation of any civil law. As such, unless the bank violated any agreement that you had with them, you have no resource, as the bank has not wronged you.
posted by saeculorum at 6:27 PM on May 26, 2011 [1 favorite]
Unfortunately, this seems to be a pretty standard operating procedure with Wells Fargo. They did the same thing, minus the appraisals of course, with the car I bought -- offered to refinance, told me jump through a bunch of hoops, and then said I'd have to pay MORE per month.
That was the last time I dealt with WF. I closed my bank accounts with them after I managed to get the loan transferred somewhere else, and told 'em where to stick it. IMO, that's your best recourse. WF sucks. (Hopefully, you didn't have to deal with the phone-monkeys who insulted you about your employment and living situation like I did.)
posted by Heretical at 6:59 PM on May 26, 2011
That was the last time I dealt with WF. I closed my bank accounts with them after I managed to get the loan transferred somewhere else, and told 'em where to stick it. IMO, that's your best recourse. WF sucks. (Hopefully, you didn't have to deal with the phone-monkeys who insulted you about your employment and living situation like I did.)
posted by Heretical at 6:59 PM on May 26, 2011
For what it's worth I just had an encounter with WF concerning an IRA account in which they did absolutely everything wrong, while giving me completely wrong information at every point. Beware of doing business with the new WF which swallowed smaller banks on your nickel and who now appear to believe that whatever they do, any losses will be taken care of by bailouts, so who cares about customers? My advice would be to believe nothing WF says, and check everything out via other sources (I used online info in my IRA battle against WF.)
posted by telstar at 12:37 AM on May 27, 2011
posted by telstar at 12:37 AM on May 27, 2011
This thread is closed to new comments.
posted by atrazine at 6:04 PM on May 26, 2011 [1 favorite]