Verbal Mortgage Rate Lock Agreements Are Worthless
by Dom C. from Kendall, FL followed by Lee's comments
Verbal mortgage rate lock agreements are worthless: Dom's lender never issued a mortgage rate lock agreement form. Although Dom got the rate he was verbally promised, he was surprised by a $1600 fee when he signed his final loan documents. He asks me if it's too late to confront the lender since his transaction has already closed.
Lee offers his views on switching lenders after locking in a rate (see his comments at bottom of page). I'm loving what he has to say until... well, more on this later.
Ask Kate: No Mortgage Rate Lock Agreement By Dom C. from Kendall, FL
I was NEVER presented with a rate lock form and never signed one at good faith time and yet I was charged $1,600 at the closing for it.
The rate was honored but two days later, after the closing, I received a rate lock form signed by them and asked to return a signed copy to them.
Of course I did not return it.
Can I now confront the lender for a lock rate fee I never agreed to?
In Florida, a lawyer is not required so we did not have one. Thank you.
Kate's Answer: No Mortgage Rate Lock Agreement
If you were not issued a written rate lock agreement, you were lucky to end up with the rate you wanted.
However, the $1600 in points must have been a rude awakening at closing.
Important Terms on Mortgage Rate Lock Agreements
Additionally, without a rate lock agreement, the terms of your lock were left wide open. What would have happened if the lock expired before closing? Could you have re-locked and what would have been the cost
? Was there a float down option if interest rates dropped? Was there a cost to cancel the lock?
My point is this. Never put up without getting a signed and dated mortgage rate lock disclosure. More on this at... Nitty Gritty Mortgage Rate Locks
You asked if you can contact the lender to be reimbursed for the $1600 fee. I don't know how much time has passed but my advice is to call the lender to discuss the unexpected fees.
But get your ducks in a row before making the call. For example, jot down the date you originally applied, the name of your loan originator, when you think the rate was locked, disclosed fees, and date of closing.
Compare the documents you were issued upfront to the closing documents. Many are signed again at closing and perhaps this can help you compile a list of required documents the lender failed to give you during the loan process.
Consumer Financial Protection Bureau
If your best efforts at solving the problem directly with the lender are not successful, you can also file complaints. Go to How to Contact Government Officials and the Consumer Financial Protection Bureau
Roger locked his interest rate over the phone. His lock agreement was faxed to him but filled out in another borrower's name. Now Roger is being charged additional points to lock in a higher mortgage rate. Read the rest of Roger's story at Broken Lock Agreement and Misplaced Loan Estimate!
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