mortgage broker

[ucrick]

I used the services of a morgage broker in Ohio to find a morgage for me. After they found a mortgage from me they told they had a mortgage that was perfect for me. I was told it was a 3 year ARM where the interest rate would increase by 3/4% per year. I did not receive any Truth in Lending papers, I just took their word for it and eventually closed on this mortgage. I later found out that this was a one month ARM and this was a negative amortizing mortgage, basically I am getting back interest added to my principle. I went back to talk with the president of the mortgage broker firm and he told me I was pretty much out of luck. I contacted the branch of government which regulates Mortgage Brokers in Ohio, and they sent me a complaint form as well as a complaint form from HUD (RESPA Papers). Basically I just want to get out of this mortgage and into a conventional mortgage. Any suggestions?

 

[HomeGuru]

I wil let our resident mortgage expert David Miller respond.

 

[David J. Miller]

Ultimatley you will need to call your local Wells Fargo Home Mortgage office and schedule an appointment for a consultation. Make sure you explain the circumsances over the telephone as the mortgage consultant there will likely want to put together some options for you prior to your meeting. Before you make the call, have the following information available:
1) Purchase price
2) Loan Amount (Current principle balance)
3) Amount of Real Estate Taxes per year
4) Amount of homeowners insurance
5) If self employed, have your tax returns for the most recent 2 years available. If you are paid a salary or paid hourly, have a recent paycheck stub and the most recent 2 years of W2s available.

When you meet with the mortgage consultant, make sure you bring all the paper work from the original closing with you as well.

It sounds to me like you received a stated income loan. Does that sound familiar? Is the current lender World Savings? If so, you probably have a prepayment penalty if you payoff early. If this is the case, you may need to hire an attorney to deal with this.

The lender was definitely in violation of RESPA guidelines by not issuing you a loan application, good faith estimate, truth-in-lending disclosure statement or an ARM disclosure within 3-days of the initial loan app.

When you closed on this, didn't anyone explain the terms of your note and mortgage?

Good luck.

What the the name of the broker, Dewy Cheatum and How Mortgage, LLC?

 

[HomeGuru]

Thank you David. You're the man.

Signed,
HomeGuru

 

[David J. Miller]

YYYYUUUUUUUUURRRRRRRRRRRRR Welcome!

 

[ucrick]

Home Guru and David Miller,

You are right, it is a stated income loan and it is through World Savings. No one explained the terms of this note and mortgage to me. Thank you very much for the advice, I will contact Wells Fargo today.

 

[ucrick]

Also, it was not Dewy Cheatum and How Mortgage, LLC.

 

[David J. Miller]

I know that. That part was just a joke. Don't yah get it?

There is good and bad news in your confirmation that the lender is World Savings and your loan was stated income. The good news is it probably means you have enough equity to refinance.

The bad news is that there will more than likely be a 2% prepayment penalty if you refinance into a different product. And, presumeably you utilized stated income because you needed it in order to qualify. This means you may likely need another stated income loan when you refinance. If you want to get out of the negative amort. loan, you'll have to go with a fixed rate loan. Not a bad thing other than for stated income, the rate will be a little higher. If your credit score is 730 or higher there is a lender that can do the loan at around 7.625% with 1 discount point. The Wells Fargo Home Mortgage Consultant there will be able to broker the loan to this company. If the consultant you speak with is not familiar with it, have them look up my name in our intranet. I'm in Minneapolis.
Good luck and keep us up to date on how things progress.