Argent-Ameriquest-AMC Mortgage We were told we had a 2/28 A.R.M. and when we called for refinance were told we had a 3 year pre-pay penalty Ripoff Orange California

You state you thought you had a 2/28 however found out that you have a 3/27.. this means that your interest rate would not adjust until the 3 year fixed rate had expired, the prepayment penalty is not excessive considering that you won't see an increase in your payments for another year.

The fact that your FICO score dropped that much is quite frankly unbelieveable that it was only due to credit pulls. You see, when you are " shopping" for a mortgage credit pulls aren't counted each and every time.. rather the credit reporting agencies understand that homeowners will be shopping for a rate and so this doesn't affect your credit score that much.

The prepayment penalty has nothing to do with the " mortgage broker" or honestly the lender.. Argent and Ameriquest were known to offer loans to folks that had little to poor credit, they offered low inital rates so that you could own a home or perhaps refinance ( for cash strapped borrowers) I by no means condone the actions of Ameriquest, but.. in the same breath will tell you, that you probalby have been declined for a new loan because of your credit score and the loan to value on your property, nothing more. Because of the " refi/purchase boom" lenders were extremely liberal in the underwriting guidelines. Argent was known to be extremely liberal, actually at times using the highest FICO score to provide the lowest rate possible.. instead of other lenders that used the Median or midscore.

Argent has always been known as a subprime lender.. so, it is important to look at the paperwork you have.. if you signed your closing statement agreeing to a 3/27, than you don't have much choice than to wait until the fixed period of your adjustable rate expires.. unless of course you want to pay the prepayment penalty.

In the mean time, I would suggest that you try not to charge up high interest credit cards, make your payments on time, and don't keep applying all over the place to get approved.. again if you have a 3/27 you don't have to worry about the interest rate or your mortgage payment to increase until then.