We decided to refinance our home when rates were low. Through a mortgage broker, we locked a rate of 3.875% with Provident Funding. The rate lock expired on 11/29/10. We signed the paperwork with a notary on 11/23/10 and final documents were back with escrow on 11/24. Mortgage broker drove to title company to pick up loan docs and handed them directly to Provident Funding at around 2 pm on 11/24.
Funding conditions on the loan were received from Provident on 11/29, the date the rate lock expired. Provident failed to fund the loan on that day, saying (in email) that they had a lot of refi applications, and couldn't get to it. Later, mortgage broker told me that Provident told him that they could not get verification of employment done on time. Mortgage broker asked for 1 day extension, and Provident would not grant it, but raised rate to 4.25%. Later, they raised it again to 4.375%.
We reported them to Better Business Bureau, and Provident responded to the complaint saying that the reason they did not fund was that docs were delivered after they closed on 11/24. They said the 25th was a holiday, and so they received docs on 11/27, less than 48 hours prior to the rate lock expiration, which they claim prevented them from setting up the loan. Of course, even if they received the docs on the evening on the 24th after they closed as they said, 11/26 (Friday) was not a holiday, and so they would have had them on the 26th.
At the time interest rates were rising, and so we didn't take a chance and secured the interest rate of 4.375%. We followed all instructions, and signed paperwork a week before lock expired. We believe that Provident purposefully let the rate expire in order to get a higher interest rate, with us paying almost 100. more per month because of their failure to honor our rate lock.
The following email is a rebuttal from the mortgage broker in response to Provident's letter of defense to Better Business Bureau.
I read the response from Provident and it is not correct. You signed on 11/23 your final documents were back with escrow on 11/24 at that time we knew your rate lock was getting close so I had my assistant, (XXXXXXX), drive to First American title and pick up your loan documents. He then drove them straight over to Provident were he handed them directly to the Provident funder. I do not know the exact time, but is was no later than 2:00 pm on 11/24. We did not receive funding conditions on your loan until the morning of 11/29 but we still managed to make sure they had all Broker and escrow funding conditions in by their 10:30 funding cut-off time. They told me your loan did not fund because they could not get the verification of employment done in time.
I will be calling escrow today so I can possibly get a log of when we picked up your loan documents and Provident should also have a log of when they received your documents. I requested a 1 day extension on your loan from the underwriter, funder and our account executive. Our account executive told us it would not be possible. Losing the rate lock on your loan did nothing but cost you and myself money. I feel we did everything in our power to get your loan funded before the rate lock was lost.