I am writing this seeking advice on what to do concerning Alpine Mortgage, after they lost $2000 at the closing of my house. The broker admits that he screwed up and never bothered to look at the terms of my loan until closing. We had, on his recommendation, got $6000 from sellers in closing costs. At signing he told us we were going to lose $2000 of it. Here is the story.
My Wife and I had been looking to purchase a house for almost a year. We found a duplex that we liked and after talking with the seller found out it would need enough repairs that we would have to get a 203k rehab loan. At first the seller was not interested in us and wanted a cash buyer, but our real estate agent convinced them we could get it done quickly.
Originally when we shopped for a loan we were looking at standard FHA, so when we needed a 203K our options were limited among lenders. We ended up going with Alpine Mortgage here in Eugene, OR. We discussed the rate options and closing costs. We had already asked the seller to pay closing costs we just needed to know how much. The rates were explained such that we knew we could either get a lower rate (4.125 at the time) and have to buy it (pay extra to get rate), or we could get a higher rate (4.25) and get a credit from lender for $2000. Since seller agreed to pay closing costs, which could include the buy down we opted for, we wanted the lower rate and asked seller for $6000 which they agreed to. This was a floating rate so I knew the terms could fluctuate.
After several weeks and signing another extension I called my broker to ask when the rate would lock. He told me that it had not happened yet, and then paused on the phone and said oh wait I do have an email saying we locked you at 4.25. I told him I was surprised it was higher since the news had been flooded with stories of the interest rate plummeting and what that would mean for our closing costs. He said rates were always fluctuating and that when they locked it was a little higher. I asked him if we could re-lock and he said it would take awhile and the sellers were already tired of the process. It had been two months since we started it so I relented and asked him what my wife and I needed to bring to closing. He said that the 4.25 closing costs would be close to the same but our down payment would rise. So my wife and I prepared ourselves to bring in the down payment and an extra $500-$1000 for the remainder of closing costs.
Another month went buy and the sellers were furious. They never wanted to sign extensions and when they did they would only do it for 2 weeks at a time. We did everything we could to speed up the process. Every week the broker told us it would be next week the lender just wanted a few more documents, or the wrong form was turned in and had to be resent. We continually got paperwork with mistakes on it. Luckily my wife was a math major and can quickly tell when the numbers dont add up. We were given the breakdown of our loan at the new 4.25 percent and somehow it said we were going to need to bring $10,000 to close! This was twice what we had been expecting before. At first the broker said that is what he had been expecting?? Then he retracted that and said that yes his processor had made a mistake, but never bothered to give us a new workup. The whole process was like that, and the broker always blamed either his processor or the lender for the hold ups.
We finally get a date to sign a few days before our last extension ran out. The sellers said they would not sign another and would rather put it back out for a cash buyer. I left messages for the broker about how much we should bring to close since we never got an exact number from him. For two days he did not return any of my calls until 2 hours before our meeting at title company. He said he did not have the numbers yet and for us just to go to signing and we could bring a check after. We sat down to sign papers and our broker was going back and forth with the title company rep about PMI and closing costs. I guess the broker had not actually ran the numbers for the new loan and the 4.25 rate that they locked us into was not costing us money, but instead came with a $2500 lender credit. He is telling me this as they put the paper in front of us to sign. Then he says that because we are getting a credit turns out we cant use $2000 dollars of the sellers concessions and it is going to go back to them. I said that I was under the impression that not only were we using it all but any small amount left would go back on our principle. He said no your purchase price stays the same and they just get the money back. I asked if we could rewrite it to lower purchase price and contribution, and he said we could but it would take weeks to get docs again and he was not sure if sellers would sign another extension. So we signed not wanting to lose the property. Afterwards we went to get check and another copy of bank statement to show appraisal. We stopped by the brokers office, and that is where I made a mistake. He had us sign a Truth in Lending agreement that showed three loans. He said he just needed it for the file and that he would date it for us. I realized after going over the paperwork that the form should have been done before, and would have broke down our loan for us showing the credit.
I asked the broker afterwards and he blamed everyone else, but in the end said it was his job to check over. He said they have been so busy doing refinances that we just slipped thru the cracks. I asked what he could do about it and he said nothing. Legally he said he or his company cant compensate us for the money we are out. Laws prohibit transactions outside of escrow. I put it to him like this so basically my wife and I get screwed out of $2000 because you were busy and did not have time to actually look at our loan his response I made a mistake like this before on a more expensive property that cost the buyer over $20,000 so it could be worse. What the heck $2000 is still a lot to me, but they just right me off like its nothing.
Is this normal? Has anyone else had a similar experience? What can I do? Is there legal action I can take? Thank you for your help and opinions.