Refince fee

[jt123mim]

Does anyone know if it is illegal to charge an upfront lockin rate fee ($600) in California? I decided not to do the refi and they are keeping my money. This was in less than a 24 hour period.

[HomeGuru]

Originally Posted by jt123mim

Does anyone know if it is illegal to charge an upfront lockin rate fee ($600) in California? I decided not to do the refi and they are keeping my money. This was in less than a 24 hour period.

**A: and why did you fail to tell us exactly what agreement you signed with the mortgage lender relative to this issue?

[jt123mim]

I signed nothing this was done over the phone.

[mortgageguy]

Minnesota,

It sounds like you got scammed. You can contact the Commerce Department in your state to check, and if they broke the law, report them. They can suspend their licence and may even have a fund where you can get your money back.

[MortgageGuru]

There are a lot of lenders that require a fee for locking in a rate upfront now. It's basically nothing more than a way to keep a borrower from shopping around and going with another lender. Lenders everywhere eat countless amounts of fees because of people backing out to go with someone else. Do all of your rate shopping first and NEVER pay an upfront fee unless it's like $50 for an application fee. That's the only one really justifiable.

[MORTGAGEman]

Only upfront fee charged is for the appraisal.

We also have a program called "Builder's Best" where we can lock your interest rate up for 365 days on new construction. For this program we are required to charge 1% or $1,000 which ever is the greater, but this is then credited to your closing costs at closing. All it does is gaurantee that you are going to stay commited throughout the 365 days.

But if it isn't for the appraisal and isn't for a program such as this... it kind of sounds a little fishy!

[jt123mim]

I thought that in order for the mortgage company to apply this fee I would have to sign a contract. In less than 24 hours I contacted the co. after thinking this loan through and deciding not to refinance, though they had already applied the fee to my credit card. I e-mailed them to tell them I did not want the loan. They e-mailed me back and said it was too late. I was under the asumption that I had to sign the contract in order for them to apply this loan.

[MortgageGuru]

Honestly, I don't think anyone on this board can say yes or no if it is legal or not. It definitely is skirting the edges of HUD's guidelines but there are a lot of lenders out there doing it.

[MORTGAGEman]

Well it sounds like if you gave them an application and also gave them a credit card it sounds like you wanted to lock in the interest rate. Why they need a credit card to lock in the interest rate is unknown, I've never needed a credit card in order to lock in an interest rate before.

Sounds like you're either stuck with the company or you're stuck with the bill.

[MORTGAGEman]

Ask your Wells Fargo consultant about the "Builder Best" program. It's for any new construction.

Builder Best is a program that allows a borrower to lock-in a rate/price on a
qualified product for a newly constructed property or rehab with an extended
lock term of 90, 120, 150 or 180 days or even 365 days.