Need Help: Screwed by mortgage broker, inspection is tomorrow...

[babystuffbuff]

I am really going to try to not make this into a b!tch, since I really, really, really need some good advice.

Yesterday we put in an offer on a great house. Today the offer was accepted. The inspection was scheduled for next week but the seller wanted it done within five days, and the inspector can come tomorrow. Fine, tomorrow it is.

Then I get an email at 10 PM from my mortgage broker. Everything had been fine, the financing was all set. I had emailed him earlier today to send us a good faith estimate of the closing costs, and he sent me one back for a loan that was not the loan we had agreed to. I asked him why, and he said that as of last week (!!!!) that loan no longer exists. This was the first that I was hearing about it. *deep breath* *don't swear* *don't punch computer*

I won't get into how I feel about the broker since that would get this post sent to another forum. :P But the bottom line is the home inspection is tomorrow, we have a closing date of August 30, and as of 10 PM tonight the loan we could afford is gone. We have inspection and financing contingencies written into the loan, but we really want this house. This was the only loan we looked at that we could manage.

Are we totally screwed? What should I do? Thanks for any advice. I'm going to go kick something now.

Sarah

[dotgirl]

Is this broker one that your buyer's agent recommended? If not, I would suggest you call your agent as soon as possible, explain the situation, and see if she can get you in touch with the broker she usually uses.

[egfmba]

Find another broker. Another broker from another firm may be able to find you a loan that this broker (joker) couldn't. Each broker works with different lenders; find another broker and they'll check their lenders and you may get a loan you can afford.

Whatever you do, don't sign anything with this broker. Advise him you're not working with him any longer and you've decided to find a new broker who will honor his word and his work and move on!

Good luck. This sucks to be without the loan you thought you had just days before inspection and closing.

eva

[Mommy Of A Little Angel]

Run and find another broker! What state are you in? PM if you'd like and I can see if I can help!

[babystuffbuff]

Thanks, I sent you a PM!

Sarah

[kellyotn]

All brokers/lenders are not created equal. They all have vastly different offerings.

Contact another couple brokers. What about this loan made it the "only loan you could manage"? Tell the other brokers this and see what they have to offer.

Contact a few lenders with a bank.

Try www.lendingtree.com or similar. Lenders will start calling you pronto.

[lovin2shop]

I'm so sorry, that really bites, to put it mildly! I do have to say in the broker's defense, that a ton of mortgage offers are being pulled right now, so he/she very well may not have done anything wrong. Check out Yahoo Finance or probably even any of the major news sites and you will see story after story. It is a really shaky time in the mortgage industry; only the safer, more conventional loans products are being offered, and even those have a risk premium added to the interest rate. Not sure if this applies to you or not, but I have to say that this tightening of the lending markets is really a good thing in the long run as too many people have been overextended with rising interest rates and are facing foreclosures/bankruptcies. It definitely doesn't hurt to check with another broker though just to make sure that you are being offered the best products available.

[janeybwild]

Sarah, so sorry to hear you are going through this stress. This may not be what you want to hear, but this may be a good thing in the long run. If that mortgage is the absolute only way you could afford this house, then it might be too much house for you. Honestly, what works on paper and the day to day struggle to keep up the max payments will exhaust you. Forget home improvements or vacations. You’ll be struggling just to stay afloat. Too bad if the furnace blows, you won’t be able to afford a new one. It could be that this mortgage type was deemed too predatory given the new light shining on these “great deals�. If you cannot afford the house after contacting other brokers, then you should absolutely walk away now before paying for an inspection. Your broker should have done a better job working with you. What does your realtor say about this?

[babystuffbuff]

Thanks - Lending Tree is actually where we got this guy. :P

The rate and payment on the loan were very good and the payment was right where we wanted it to be; I should have known it was too good to be true. Our credit and income are very good, we just don't have a lot of cash on hand for a big down payment. My realtor recommended two people to me and it turns out one of my coworkers' best friends owns a mortgage company.

DH wants to go through Lending Tree again and apply, so I suppose I will try them again.

[kellyotn]

Good luck. If it is just a matter of cash-on-hand, they should be able to help you. Definitely shop around. The first broker we looked at for this house had a HUGE "origination fee". We used our previous broker (even though she was in another state!) because she had no such fee. This allowed our downpayment to be that much larger and was totally worth the hassle of using her, out of state and all.

[babystuffbuff]

Hi Janey,

It is not that this was the only loan that we could afford - did I say that in my original post? Argh. This was just the loan that worked best for our situation. We are qualified for others through the same company, I am just not willing to work with this particular broker anymore!

The house comes with a 1 year warantee so if the furnace blows, we will only have to pay a $100 deductible to get it fixed. But I understand what you are saying about the costs in the long run.

The realtor thinks we have time to find another loan before closing, she does not seem worried about it. I am trying to share her optimism. :)

[spu]

we used a mortgage broker 3x (the same guy) and had great experiences all around. If it was a real estimate, it should have had a date on it - like a 90 day lock in... usually that happens when you give a small deposit (like $250) to get the process started. If you don't "lock in" a rate by signing a document and paying the deposit, then yes - it changes daily. The longer the rate lock, generally the higher the rate will be - for instance, a 120 day rate lock may be 6.75% and a 30 day lock may be 6.5%... See if there's any other bank he can work with. You can do a search for current rates each day to see how they change on a daily basis, but once you're satisfied, "lock in" your rate. It's like gambling, though, because unless you purchase downward protection, if the rates drop after you lock in, you may not be able to get the lower rate. Talk to your broker about all your options.

good luck!

susan

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twin girls charlotte + else
+ cashew! 10.06 + OMG #4! due 2.08

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[bostonsmama]

Yes! What she said! If you didn't lock in the loan rate, then technically the broker didn't do anything wrong. Rates change every day...like the stock market. If you did, then you should be talking to his/her boss about getting your deposit back. Bait and switch is horrible and warrants a call to the attorney general of your state if that's what happened.

Hugs...this is a tough market to navigate (the lending industry, not the real estate market--that's actually great for the buyer these days). I know...my mom's a realtor and her DH is a mortgage broker. This business is nuts. See what others can offer you, but don't feel too frazzled. If it's meant to be, it'll happen! Chin up! :)

[jdm]

dp

[jdm]

I'm a little late with this but have you checked with the Navy Federal Credit Union? They usually have pretty good rates. You can join if your husband still works for the Academy.

Good luck!

[babystuffbuff]

Thanks for your response.

We have not checked with NFCU, but I doubt they will say anything new. We have tried pretty much everywhere else and it's a pretty hopeless quest. We are going to have to give up the house. :(

[Mommy Of A Little Angel]

If you are government or military, try USAA too. They are great! I would call them and explain the situation. They have always been really helpful to us. Good luck and I hope things work out.

[babystuffbuff]

Thanks for the suggestion. We are not military - DH is a civilian, he just works for the Naval Academy, so unfortunately we are not eligible. :(