My lender didn’t rate lock on time and rates went up

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My lender didn’t rate lock on time and rates went up

Evelina Khaimova
Member since 2021 · 20 posts · 0 votes

Hi guys. Can any actions be taken against the mortgage broker for not locking in my rate when the rate was still low? We have been trying to refi since November. We are in March and we have submitted everything they asked for and have been doing everything they asked for. The broker sent us the loan commitment letter to sign but the language in there indicated it was "variable" - I of course questioned that but it took him (no joke) 3 weeks to answer the question of if it's in fact variable or fixed. When he confirmed, we asked him for a new loan commitment letter without any wording of variable and then we were waiting and waiting. Long story short, he apologized for dropping the ball and missing the time to lock our rate when it was still low. Now rates are higher and he is asking that we bring more money to the closing to lower LTV. We were already bringing more than we originally discussed. I'm disappointed and at this point financially drained becuase we have to maintain our crazy mortgage and we had to pay off some debt under his request. Is there anything I can do? He did say that he will try to close us at the lower rate and will loose our commission but then he said he will do that and we would have to bring more money to closing table. It's been almost 2 days and we still don't know how much money. Any advice would be greatly appreciated!! Thank you!!

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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
5y

Where did you find the lender? #whoyouworkwithmatters. Not all real estate professionals are created equally. Many people have their balls dropped while shopping for things like the cheapest rate instead of working with a quality professional. Always ends up costing more in the long run as we see this story as an example. 

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    5y

    Trying phoning him and call another broker.  Even if the other broker can't get you a better rate, I'd drop this guy.  It shouldn't take 3 weeks for him to respond or 6 months for him to do the refinance.

    5Reply
  • Ryan Howell
    Rental Property Investor · Hendersonville, NC · Member since 2016 · 446 posts · 412 votes
    5y

    I would see if you can buy down the rate (pay points), but since its his fault, tell him he needs to waive some of the origination and other fees to offset your points and make things right.

    5Reply
  • Evelina Khaimova
    OP
    Member since 2021 · 20 posts · 0 votes
    5y

    @Ryan Howell I really don’t want to bring more money to closing when I did everything I should and more to get this loan closed. We already paid off credit cards under his instruction and we already agreed to bring more money than we originally had agreed to. He is offering to get the loan closed by loosing his commissions but in reality he IS instructing me to bring more money to closing. In fact he said that we would have to pull money out of our retirement account. He told me over email he will get us numbers “tomorrow” - this would of been last Friday. It’s end of day Monday. I’m still waiting for the numbers. I just feel like we aren’t his priority anymore and when I am telling him we need to close because we can’t keep paying this crazy mortgage - he isn’t being responsive. I don’t want to file a complaint but I want to know what my options (rights) are as a consumer of a mortgage just in case if he really decides to drag this out for longer than I could handle at this point.

    0Reply
  • Evelina Khaimova
    OP
    Member since 2021 · 20 posts · 0 votes
    5y

    @Theresa Harris - i am afraid to switch to another mortgage broker becuase restarting a new loan means that we would have to go another 30-60 days (in NY) by paying this crazy mortgage because they will need to do appraisal again, order title again, etc. All this guy needs to do is lock our rate and we can close! But instead he is dragging it out. When we call by the way, he doesn’t answer. 

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  • Ryan Howell
    Rental Property Investor · Hendersonville, NC · Member since 2016 · 446 posts · 412 votes
    5y

    @Evelina Khaimova - I'm suggesting you DON'T bring more money to closing....The loan officer probably doesn't control the rate, but they can control their fees.  Lock the rate and pay the points to get back to the same rate, then suggest they reduce their fees to offset the cost of the points since they made the mistake.  If the loan officer refuses, ask to speak with their manager.

    5Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    5y

    Where did you find the lender? #whoyouworkwithmatters. Not all real estate professionals are created equally. Many people have their balls dropped while shopping for things like the cheapest rate instead of working with a quality professional. Always ends up costing more in the long run as we see this story as an example. 

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  • Alexander BaconPro Member
    Member since 2020 · 17 posts · 14 votes
    5y

    Drop this lender immediately and don't look back. You shouldn't have to pay for anything again when finding a new lender. The appraisal, inspections, title etc should all be fine. One time I purchased a property and refinanced 6 months later. We just used all of the documentation I had which was 6 months old to refinance. If you're in a position with a lender like this and you do not get a response within two business days, find someone else. It's your money and you're ultimately the one in charge. There is absolutely nothing you can do at this point with the current lender because he is not legally obligated to respond to you or lock in certain rates at a certain time. Leave a poor review if you feel so inclined (I would do it as a cautionary statement to inform others so they don't have to go through what you have). Then, call other lenders, explain the situation, and ask if you can use the previous documentation for them to underwrite the refinance. You should be able to find someone who can help. I would not use this lender unless they give you a deal that is so incredible they are literally paying you to take this deal and keep you as a customer. I am not saying you can get better rates, but you should demand better service. Good luck and I hope it all works out to your benefit

    4Reply
  • Matt Ziegler
    Rental Property Investor · Colorado Springs, CO · Member since 2020 · 433 posts · 284 votes
    5y

    Evelina,

    Like Alex already said...drop this dope and get yourself another lender/mortgage broker. 
    all your paperwork,appraisal,title,etc. should transfer no question.

    Only do business with people who you trust and respect.

    Best wishes

    2Reply
  • James Leigh
    Rental Property Investor · Jacksonville, FL · Member since 2021 · 42 posts · 23 votes
    5y

    Unless there are some unusual circumstances surrounding your property or your current mortgage, that timeline is a little excessive. Just closed my cash out refi last week. From time I made the phone call to inquire to the time funds were wired to my account was right around 6 weeks. Although I’m beyond punctual with my document submissions, even if I moved at a snails pace it wouldn’t have taken as long as yours has been going. That would have raised red flags about this brokers professionalism from the start. Given, I don’t know the whole story, I agree with others above. Either get credited for you having to pay points to get the rate back where it should be, or find another broker.

    Best of luck!

    0Reply
  • Evelina Khaimova
    OP
    Member since 2021 · 20 posts · 0 votes
    5y

    @Matt Ziegler I am being told by new broker that I need to pay for new appraisal. Is that right? 

    0Reply
  • Lorin MonesBusiness Member
    Realtor · DC MD, VA · Member since 2017 · 20 posts · 8 votes
    5y

    @Evelina Khaimova sounds like you need a new lender!

    [email protected]202-494-0110
    0Reply
  • Evelina Khaimova
    OP
    Member since 2021 · 20 posts · 0 votes
    5y

    @Ryan Howell

    I got an email from him, he wants me to bring double the amount he asked me to bring to closing previously. He is saying he will give me the rate I am looking for but I need to bring more money to

    Close. I don’t understand how we went from - you are qualified and mortgage got approved to if you don’t bring double the amount we already agreed to- you won’t qualify. I asked for official paperwork. Let’s see what these numbers break down to.

    0Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    5y

    I'm not sure I get the "crazy mortgage" part. That to me sounds like one of two things: either you have a huge mortgage relative to your income, or you have a huge interest rate relative to where rates are. In either case you don't sound like an ideal borrower - you are mortgaged to the hilt and/or have no/poor credit such that a lender feels like you are a bigger loan risk. That's probably where the "bring more money to closing" comes in, as your post mentions having to pay down credit cards etc. before qualifying.

    When you combine the above with what sounds like some kind of discount broker, it's really not surprising that you seem to be having problems closing.

    As for the appraisal - yes, generally every lender wants to order their own appraisal. So if you start over - and maybe you should, regardless - you'll be on the hook again for an appraisal. And as for taking action against the broker for the rate lock issue - no, you'll go nowhere there. No one is required to give you a loan; they would simply say they couldn't lock your rate because you weren't yet qualified. 

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    5y
    Originally posted by @Evelina Khaimova:

    @Ryan Howell

    I got an email from him, he wants me to bring double the amount he asked me to bring to closing previously. He is saying he will give me the rate I am looking for but I need to bring more money to

    Close. I don’t understand how we went from - you are qualified and mortgage got approved to if you don’t bring double the amount we already agreed to- you won’t qualify. I asked for official paperwork. Let’s see what these numbers break down to.

     Time to talk to their supervisor.

    0Reply
  • Evelina Khaimova
    OP
    Member since 2021 · 20 posts · 0 votes
    5y

    What do I say to supervisor? 

    0Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    5y

    @Evelina Khaimova I have worked with the same lender for many years. He has always been extremely responsive. When I went to lock in refinances in December, I noticed his responses were not as fast as normal. It didn't take him weeks or months, but I know he was overloaded with refinances. He told me the underwriters and title company were also overwhelmed. They were prioritizing new home purchases. He did lock in my rate, so it didn't affect me financially. I am just mentioning this because all the people saying fire him and go somewhere else, may not be aware exactly how many refinances have been going on. 

    It makes sense to look at other options, but there is the possibility that another mortgage broker may not offer you a better deal. I would not assume the appraisal can be moved to a new lender. My mortgage broker has no control over what appraisal is used and he can't reuse an old one. He told me they are randomly assigned. This is a change that took place since the housing crash. Prior to the housing crash, lenders could select appraisers to manipulate value.

    Ask to see a sample settlement statement from your current lender. It should show all fees, interest rate, cash requirements and payment. Go to a new lender and have them create a sample settlement statement. Compare the two and go with whichever one is financially better. A new lender may have higher fees or may not, don't assume either.

    Your current lender absolutely dropped the ball, but you let it get out of control. You should have been on the phone with them every week and you should have walked away before the appraisal. At this point, you need to figure out the best financial decision, which means comparing the numbers. 

    3Reply
  • Patrick Britton
    Ann Arbor, MI · Member since 2014 · 1k+ posts · 997 votes
    5y

    I don't think it can be said enough that there are good and bad people in all professions. Unfortunately, because of the allure of wealth and prestige and fame and fortune and all that other nonsense, a lot of people become who loan officers should actually remain in the ditch digging business. They simply don't have the mental horsepower needed to prevent their client from getting totally screwed over.

    However, in this loan officer’s defense, what conversation was had and when was it had about locking the right? Yes, loan officers should, by practice, have a discussion with their clients about rate locks, but not all do. Perhaps this loan officer, for whatever reason, believed without a doubt that rates would continue going down in which case by locking the rates you would have been hurt by a lock.

    But all of that aside, it sounds like you're dealing with the loan officer who is working with his first client And things are not going well at all. It shouldn't take anybody three weeks to come up with any kind of answer. Clearly, this loan officer forgot about you entirely.

    You are in a nightmare position and nobody really has an ideal solution that makes everybody happy in this case. Unfortunately, you're going to have to make some tough choices and only you can make those decisions

    0Reply
  • Joshua Haynes
    Aurora, IL · Member since 2019 · 125 posts · 39 votes
    5y

    To me, this guy sounds untrustworthy in the long run so trusting him now might not be the best thing

    1Reply
  • Eric Bilderback
    Real Estate Agent · Sisters, OR · Member since 2014 · 1k+ posts · 1k+ votes
    5y

    Man that is a bummer.

    As pissed as you are I would try and close with the best rate you can get ASAP.  Rates shouldn't have moved so much that this deal won't work now.  Try and not dwell on it next time you will be more equipped to find a more squared away mortgage guy.  The big picture this should be small potatoes. 

    0Reply
  • Caroline Gerardo
    Lender · Washington DC · Member since 2015 · 2k+ posts · 2k+ votes
    5y

    Do NOT take money out of retirement account, you will owe taxes on top of any penalty, no no and no. A refinance should take 30 days unless you dripped in your income paperwork or failed to disclose income or took cell phone pictures of information. If you started in November all the paperwork is too old. Did the lender gave you a list of what was needed: All IRS returns past 2 years, w-2 past two years, 1099's, award letters, mortgage bill last month, name email of fire agent, HOA contact and bill, bank statements every page past 2 months, current paystubs past 30 days- contact information for employer, identification, if you have rentals schedule of real estate owned or profit and or loss if self employed for current cycle. Appraisal won't be good for another company unless it's FHA, and probably the old lender that appraisal is too old to use. Rates are nominally - a tiny bit higher than in November.

    0Reply
  • Carlos Ptriawan
    Member since 2019 · 7k+ posts · 4k+ votes
    5y

    I understand the pain. My refi took 5 months from one lender. The thing is interest rate is going up as we've been vaccinated. I bet even if you move to different lender, the number will be something that you don't like either.

    0Reply
  • Joseph Johns
    Tucson, AZ · Member since 2018 · 10 posts · 13 votes
    5y

    @Evelina Khaimova

    Better mortgage. I refi’d in three weeks flat 2.5% fixed.

    0Reply
  • Dan H.Pro Member
    Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
    5y
    Originally posted by @Russell Brazil:

    Where did you find the lender? #whoyouworkwithmatters. Not all real estate professionals are created equally. Many people have their balls dropped while shopping for things like the cheapest rate instead of working with a quality professional. Always ends up costing more in the long run as we see this story as an example. 

    I had a mortgage broker with not the lowest fees, but first rate service and always got me the loan.   A different lender solicited us with a rate that was lower than our mortgage broker was offering and with significantly lower fees.  We jumped at it like a fish hitting the worm on the hook.  We got all of our documentation in and the loan appeared to be progressing perfectly.  At the 11th hour we were told we did not qualify for the loan.  Too many write-offs the year prior.  Of course the lender had our documentation for many days prior to not getting us the loan.  They should have seen this the day the documentation was provided.

    We went back to our usual mortgage broker who had always gotten us financing and refinanced.  Of course the rates had gone up.  it was not a cheap lesson (we were refinancing 3 San Diego MF properties), but it was a valuable lesson.

    The initial reliable mortgage broker this past NYE refinanced 8 of our loans with cash out, all but one non-oo, all but two multi family at rates from 2.75% to 3.125% (actually there was one outlier higher than 3.125%).  He continues to give us great service.  For the 8 loans on the same day, he lowered his rate, but IMO he has earned his normal rate (but I am happy to pay less).  

    A lender has to be able to close on the loan as advertised.  If they fail in that area, find another lender.  If they do not call you back virtually immediately, find another lender.  

    If you have an incredible lender like ours, they provide free extra services such as offering to escrow any day of the week (including Sunday), preliminary title checks on auction properties, skip trace services, automatic comps/valuation.  This type of service warrants their fees.  Sometimes you get what you pay for and sometimes, even when going with a bargain price, you end up over paying.

    Good luck

    3Reply
  • Crystal S.
    Lender · NJ · Member since 2016 · 41 posts · 14 votes
    5y

    @Evelina Khaimova

    Hi Evelina,

    I’m sorry this happened to you, generally if the lender dropped the ball they should be giving you some lender credits to make up for their fault!

    I personally would not deal with them!

    What rate did he give you now? Is it fixed? Also I would read your closing disclosure to see if he is already charging points that your unaware of!

    I have refinanced loans to where a client was with another lender and they had no idea that that lender was charging them $8,000 in points!

    Make sure your reading your closing disclosure throughly.

    Also there is a 3 day rescission period which means even if you do sign you still have 3 days to back out of the loan after signing.

    Regards,

    Crystal

    1Reply
  • Philip GarciaBusiness Member
    Lender · Los Angeles, CA · Member since 2020 · 13 posts · 3 votes
    5y

    @Evelina Khaimova Do you have email correspondence showing you requested the lock during their lock hours? If so, ask the LO to escalate to their manager to honor that pricing. If it means adding discount points to get that rate then a lender credit to offset the added costs, then so be it. Or ask the LO to honor the lower rate and have the lender portfolio the loan. Exceptions can be made.

    0Reply
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