Refinance foul up -- is this even legal?

[branv]

We had our home loan with Countrywide when it was, of course, bought out by BoA. Now let me say up front, I HATE Bank of America. We used to have all our banking with them, but they messed up things so often (and were so rude about it), we'd moved all our accounts away. So, we weren't thrilled when BoA assumed our loan, but c'est la vie.

We decided to refinance, checked around, and the best terms were to stick with BoA. I should have listened to my gut instinct, but frugality won out. And seriously, it's been a PITA with no returned calls, being shuffled through 3-4 different people, etc.

BUT, when our appraisal came in at a good amount, we were able to drop our PMI and escrow account, switching from a FHA loan to a conventional loan. We never opted or were required to pay points either. So through all this, we've gotten 3-4 Good Faith Estimates as terms changed. Each time, it showed $0 would be owed for origination or points. We even asked our original rep why there was no origination fee (or its sister app fees, points, etc) as others had wanted to charge us this. He stated it was b/c we were already customers.

So, again, each new GFE, even from different rep...still no origination fee. But today we received our closing info from the Title company as we are supposed to close on Wednesday (which, incidentally, is the deadline of our lock-in rate). My mouth dropped when I realized that our closing costs had gone up over $1000! Some, I expected. But $872 of this are origination fees, half considered a fee for application, another half as "points".

To top it all off, all our GFE's from beginning to end state the standard legalese that our Origination Fees will not change. And it's my understanding this is the law (under RESPA).

Even in the closing document we were provided it has a place comparing GFE's quotes to your actual costs. It claims in one spot that our GFE quoted us $472 for points (which none of them do), and in another spot clearly says our GFE shows $0 for app fees but the new cost is $400.

So am I wrong? Isn't this illegal? We haven't heard back from our (latest) rep, but DH spoke to the title guy who confirmed these numbers were the same he received from BoA. DH told him to inform our bank we are not moving forward until this is cleared up. So now, I just want to have my ducks in a row before I tackle them.

And what I want to know is, if they pretty much tell us "tough...take it or leave it", who do you report this kind of activity to beyond the BBB? Especially since they already cost us $500 for our appraisal?

I told DH this is all b/c we've had painless closings in the past. Our luck ran out.

 

[kaytieeldr]

You don't report it to the BBB. People have a misinterpretation of what the BBB is and does.

Contact your state's Attorney General or Consumer Affairs Department for help, or at least direction.

 

[Ericandjenng]

Branv--I feel for you. We got stuck with BOA when we refinanced--went through a mortgage broker that sells all loans.

Do you have any friends in the real estate business? Or in banking? To me (and I am NOT in either) it seems like a "bait and switch" scheme which is supposed to be illegal. But proving it could be difficult.

Good Luck!

 

[averill94]

They cannot just charge you points at this point- unless there is a "change in circumstance". This might happen if the appraisal came in lower causing your LTV to increase therefore your rate might increase. So to keep the same rate from the initial GFE one could possibly pay a point. However this is NOT you.

Go over every single fee with a supervisor. Hopefully it has to do with your taxes or title.... (ususally the GFE is highballed and the closing costs actually come in lower). Or were you locked in and need to extend? If so they might be charging you for the extension.......

They said they are protecting the consumers with these new GFE's- they are not. It is more confusing than ever!

If you are still not happy call your state banking department. If it is your primary home you have 3 days recission period here in NY.
Good Luck!

 

[branv]

Thanks so much for the info!

I was all geared up to tackle this today but woke up to read the location our rep is at is iced over. So I'm guessing no one got into the office today. Hope someone gets the message we won't be at closing tomorrow!

 

[Swimalie]

You have some good advice so far. Good luck is the best I can say. We just refinanced and were totally surprised to find out new info the day of as well. Luckily we were warned in time to grab the check book. Ours was just for interest that we needed to pay until the new loan paid out. A month later, we got most of it back.

 

[Kirby]

Sorry to hear that you've had trouble with your refinance. Countrywide used to own our mortgage and sold out to BOA. We refinanced with them last September and it was a breeze, no trouble at all and no extra costs at the end.

 

[Debbie7452]

If it is a violation of RESPA than you can file a complaint through HUD. Now I'm hoping you will get the fees taken care of and not need to fight further but it is an option. I used the HUD complaint process when BofA forgot to pay our property taxes through our escrow account and then charged all of the penalties to our account when they finally paid them. What a mess...it took 8 months of pursuing them to get a refund of almost $1000. HUD was actually very helpful and responsive. I did not expect much from a govt. agency (sorry, I am cynical).

In the mean time we refied and took our mortgage somewhere else. We went through a broker, but I told him "anyone, BUT not BofA!"

 

[brenalexacamp]

this happened to us with the Morgage Specialists. We got up from the table, told them we were not getting the warm fuzzy and thanks for wasting our time. i think they think you are so bent on signing and will just say oh ok then.
Let me tell you we stood up, ready to walk ut- they changed everything and gave us what was quoted. all of a sudden they found a mistake.

 

[seashoreCM]

Don't close until this is resolved. They may not charge points that they at first said would not be charged.

Now they may charge a plain ole' application fee, but that too needs to stated as such in the good faith estimate. In many cases the application fee is applied towards the appraisal. If the GFE said that the application fee was applied to nothing other than application then you would have decided way back when whether to do the applicaiton anyway.

If something is wrong with the application and you cannot close at the time scheduled, you can continue to reject the loan if they try to charge you another fee for rescheduling.

Q: What is prepaid interest:
A: Let's say the mortgage payment is due on the first of the month. The February payment contains the January 1-31 interest. The March payment contains the February 1-28 interest. Etc. But let's say you close in the middle of the month say January 15. You pay the January 16-31 interest on closing day, not on February 1. This interest is called prepaid interest. (In this example your first regular mortgage payment is due March 1) Prepaid interest need not be stated on your GFE.

 

[ccgirl]

Do they credit you back the fees at closing? I know with our mortage we did a no closing cost. It showed closing costs but they were all credited back at closing. Just a thought.

 

[kmacht]

You should not be dealing with BoA's rep on this one. This is the exact reason you should always have an attorney working for you (not one the bank assigns) when you go to do anyting with your mortgage. It is that attorneys job to do things like check for a clear title, review the terms, and address issues just like the one you have. If you already have an attorney then ask them to find the problem. If you don't have one, don't sign anything else or give them any money until you do.

Keith

 

[branv]

Thanks everyone! You really helped me prepare, and being prepared meant I was calm and not flustered when I spoke with them. Finally spoke with them today, and they were mostly just very confused but not remotely snarky or defensive. I was ready to do battle, but darned if they never even made it an issue.

I will admit at this point I can't be totally certain if the mess up was b/c the first (evil) rep lied, accidentally messed things up, or if he was a victim of their computer system. All I can say for sure is a) he never old us switching our original refi app from an FHA to a conventional would add points/fees b) it should have and c) that while the later reps I dealt with could look at their system and see our loan had origination fees, they fully admitted for some reason it wasn't populating into the GFE's it generated. I shouldn't be surprised as earlier on the GFE kept saying we had to pay for insurance at closing, and the rep kept saying it was a system glitch they knew about and needed to fix.

Either way, it's handled. They fully admitted it was 100% their fault, and are giving us a credit. The very nice lady even laughed and said, "We're really glad you caught this as our loans are audited after the fact, and this may have come up later. And we just really prefer to not get on the radar of the government."

Thanks again! Love the Budget Board

 

[StephMK]

Wow, congrats! I would not have expected your story to end so smoothly w/BOA but glad it worked out for you. They are our mtg co too and I'm not thrilled with them.

 

[Ericandjenng]

 

[Swimalie]

I'm glad it all worked out for you. Good for you for being so informed and calm