Mortgage Rate Lock Stall Tactics
by Michelle from Wake Forest, North Carolina, USA
Ask Kate about Mortgage Rate Lock Stall Tactics: Kate, I was just reading a post about a very similar situation my husband and I are in -- I also believe the lender is stalling on our mortgage rate lock. We have outstanding credits scores (800+), amazing debt to loan ratios, and we owe 182k on a 500k valued house.
We locked in on the 3rd of Feb and due to the timing of the end of the month, holidays, etc, we only have until the 23rd to close.
The problem is, the lender is trying to find any excuse they can to delay this process. They want us to finish our attic (!?!) before they lend us the money.
I believe this is a stall tactic since we locked in at 4.125 percent and literally the next day the rates started going up and did not stop going up. I believe they are trying to get out of this loan.
Is there anything we can do since our locked rate has not yet expired but our time is running out? Will threats to call the Attorney General help?? Thank you!
Kate Answers: Mortgage Rate Lock Stall Tactics
The amount of letters I receive about losing mortgage rate locks is shocking.
When I originated mortgages, I monitored locked-in interest rates very carefully and that is why I have such a bone to pick with this subject!
Mortgage Rate Lock Precautions
Now that's not to say mortgage borrowers can't take precautions also. The less time an interest rate is locked, the less it costs. But this is not the time to cut corners.
Before locking in rates, borrowers need the advice of their mortgage lender. Ask what the current turn times are. Take into consideration holidays and end-of-month crunch times.
In your situation, requiring an attic to be finished seems petty unless it poses a risk to safety. Of course if the appraiser counted an attic bathroom or bedroom under construction in the appraised value, that's another story.
But let's assume the lender is stalling because mortgage rates kept climbing after you locked in. If so, you have every right to expect your home loan to close under the agreed upon terms.
Resolving Disputes Over Mortgage Rate Locks
How can disputes over locked in mortgage rates be resolved? As I have mentioned before, put on your best walking shoes because there's probably a long hike ahead of you.
Create a timeline of pertinent dates, application date, lock and expiration dates to begin with, and submit them to a person of authority if you can't reconcile this with your individual mortgage originator
. Keeping track of names, dates and subject of conversations, follow up discussions in writing.
However if you are not satisfied that your concerns are being addressed satisfactorily, here is what the Federal Reserve Bank of Richmond (the district North Carolina is in) suggests.
"If you think your financial institution has been unfair or deceptive in its dealings with you or has violated a law or regulation, as a consumer you have the right to file a complaint." --Consumer Issues Quick fact:
The Federal Reserve System sets monetary policy, supervises and regulates member financial institutions.
Depending on the specific financial institution you are using, it may be more advantageous to contact your North Carolina attorney general at (919) 716-6000.
Michelle, I hope this can be settled at the local level directly with your lender. Would you let me know? I'd like to hear back from you.Comment on Mortgage Rate Lock Stall Tactics
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