Mistake by lender in interest rate

[jewels444]

What is the name of your state? Maryland

My mortgage company made a mistake on the 2nd mortgage documents sent to the title company before closing on our house. We have a first mortgage at 5.5% on a ten year arm, and a second mortgage, that was supposed to be written as a variable rate starting at 6.0%, but was mistakenly written at 5.5% fixed for 300 months. We've already gotten statements that reflect this low rate, and we've made payments. But the mortgage company caught their mistake a few weeks ago and they've been calling about it. They want us to sign a document that allows them to change it to 6.0% variable. Do we have to agree to it? Aren't the papers we signed at settlement the legally binding documents? The application we filled out for the second mortgage said 6.0% variable, but we were also told that it was in no way committing us to any terms, it was just the application. This is obviously financially advantageous for us, and we're not sure if we should sign these papers or not. Any advice? Do they have any legal recourse?

[huk]

[url]http://www.hud.gov/offices/hsg/sfh/res/respa_hm.cfm[/url]

Im a mortage broker, and i gotta admit this is new one on me.

Originally Posted by jewels444

What is the name of your state? Maryland

My mortgage company made a mistake on the 2nd mortgage documents sent to the title company before closing on our house. We have a first mortgage at 5.5% on a ten year arm, and a second mortgage, that was supposed to be written as a variable rate starting at 6.0%, but was mistakenly written at 5.5% fixed for 300 months. We've already gotten statements that reflect this low rate, and we've made payments. But the mortgage company caught their mistake a few weeks ago and they've been calling about it. They want us to sign a document that allows them to change it to 6.0% variable. Do we have to agree to it? Aren't the papers we signed at settlement the legally binding documents? The application we filled out for the second mortgage said 6.0% variable, but we were also told that it was in no way committing us to any terms, it was just the application. This is obviously financially advantageous for us, and we're not sure if we should sign these papers or not. Any advice? Do they have any legal recourse?

I agree with huk: I've never seen the mortgagor make a mistake in the LENDER's favor!

Unfortunately, the mortgage company is in the right. If I go to a store to buy a pound of hamburger and pay for a pound of hamburger but get two pounds of hamburger, the second pound is not mine.

In any event, do a little negotiating with them.

You certainly have them over the proverbial barrel.