Crooked Mortgage Broker in NC?

[kalyhan]

NC State

Hi Everyone. I've run into a couple of problems with my mortgage broker.

I was pre-approved in March 2006 by this broker after completing their application. I chose not to buy the house I initially wanted. I found another house about 1.5 months ago - asked broker for a pre-approval letter, submitted updated paystubs & bank records. I received a mortgage commitment letter - which I gave to the realtor of the house I wanted to purchase.

I made an offer, signed a contract and submitted my deposit. The mortgage broker has now had all my paperwork for a month and a half (I have yet to see a good faith estimate!). They have also had the property appraised.

Now, shortly before my contract expires, they tell me there is one negative item on my credit report. I fax them a copy of a very recent letter I received from Equifax stating they investigated the charge (a very old account) back in March 2006, and the creditor said there is a zero balance.

I've explained to the broker that I cannot promise I can clear this up overnight - it may even take up to 45 days.

I just received an invoice today from the mortgage broker for $400.00for the appraisal.

My Questions - Should the broker have stopped the appraisal process until I could clear up this matter with the creditor? Should I be legally liable for the appraisal? If my contract expires before I clear this matter up, what happens to my deposit?

Thanks for any info.

[acmb05]

Originally Posted by kalyhan

NC State

Hi Everyone. I've run into a couple of problems with my mortgage broker.

I was pre-approved in March 2006 by this broker after completing their application. I chose not to buy the house I initially wanted. I found another house about 1.5 months ago - asked broker for a pre-approval letter, submitted updated paystubs & bank records. I received a mortgage commitment letter - which I gave to the realtor of the house I wanted to purchase.

I made an offer, signed a contract and submitted my deposit. The mortgage broker has now had all my paperwork for a month and a half (I have yet to see a good faith estimate!). They have also had the property appraised.

Now, shortly before my contract expires, they tell me there is one negative item on my credit report. I fax them a copy of a very recent letter I received from Equifax stating they investigated the charge (a very old account) back in March 2006, and the creditor said there is a zero balance.

I've explained to the broker that I cannot promise I can clear this up overnight - it may even take up to 45 days.

I just received an invoice today from the mortgage broker for $400.00for the appraisal.

My Questions - Should the broker have stopped the appraisal process until I could clear up this matter with the creditor? Should I be legally liable for the appraisal? If my contract expires before I clear this matter up, what happens to my deposit?

Thanks for any info.

Do you have a financing contingency in the contract for the house? Yes you pay for the appraisal.

[kalyhan]

The contract states that I agree to have financing by a specific date - which now the mortgage broker will not give until the creditor matter is cleared up. I don't think I can clear it up before the contract expires.

If I was "pre-approved" by this mortgage broker (on two separate occasions) and they had full access to my reports, isn't this something they should have seen before appraising the property?

Ordinarily, I would pay the appraisal, I understand this. But my gripe is that this seems a bit shafty that they are billing me for the appraisal now when they could have said something months ago - before making any offers on houses, before signing any contracts and certainly before having this property appraised.

What happens to my deposit?

Thanks again.

[Bigfoot]

Ask your Realtor to help you find another lender. This one is taking too long and actually, unless this is a really huge property, $400 is more than what I've seen an appraisal cost. Generally they are around $300-$325 depending on whether or not it is an appraisal for an FHA property.

If the issue on your credit report indicates a zero balance, is it affecting your credit score?
You can get a re-score if that is the case. That shouldn't take 45 days, which is why I think you need a new lender.

Ask another lender if they will be willing to use the appraisal that you're being charged for, which might cost you $75 for a transfer fee.

Your Realtor can get you an addendum to extend your purchase contract, which the Seller is likely willing to sign. Your deposit is likely based on your ability to purchase, which should be safe in being returned to you if financing completely falls apart. I can't think of why it would be nonrefundable, unless this is a new house and you picked out extra items for the builder to provide.

Consider letting the current broker know also that you will be reporting him to the NC Commissioner of Banks (which licenses mortgage brokers) and HUD for failing to produce a Good Faith Estimate. If the broker works through a national bank then the Commissioner's Consumer division will forward your complaint to both that bank and a federal agency.

[kalyhan]

I will do as you suggested. Thanks for your advice.

For the record, the house is not new. I am still steamed though, that the broker is charging for an appraisal after first approving me for a loan and then turning around advising they cannot get the financing until I get the credit item cleared off. The broker had access to my reports for months. They could have said something long ago, but didn't.