We have signed a contract with a brokerage firm and now they are stating that they cannot find anyone to fund the loan. They claim that there is an error in the % rate in the signed contract. The contract was signed and submitted over 1 month ago. Is this legal? The rate is consistent through the entire contract. We want the loan to be funded at the quoted rate....what recourse do we have? Thanks

Fr_Chuck

You are protected by every promise in the contract, since none of us know what terms was in that contract we can not tell you what your rights are. Your best bet is to have a real estate attoreny or a contract attorney review this and tell you what you can or can not require of the brokerage firm, I know when we had a a firm find us a mortage, all they did was to have us agree we would take one if found by these terms.....
and if not found we were not bound. It made no specific promice in writing that they would find one. ( the broker made some verbal promises but not in writing)

pjaul

The contract said 6% and now they are saying they cannot find anyone to fund at the amount and want to change it to over 7. The lower rate was for an adj. rate and they are claiming it was not for a fixed rate as they stated.

excon

Hello pj:

If you want people to be bound by a contract, you must pay some consideration, like a down payment or a deposit. You didn't. Therefore, you don't have a binding contract. Consequently, you have no recourse other than to shop somewhere else. They don't have any of your money so you're not out anything but time.

excon

Fr_Chuck

Normally a brokerage firm can not promise you any certain rate, they give you estimates of what they beleive they can find for you. So you need to READ the contract you had with the brokerage and see if they promised you a certain rate or gave you an estimated rate that they ar currenty getting.

Since no firm knows the exact rate untill they shop your credit around with your estimated closing date.

After the brokerage finds the best rate ( which will get them the most commission) they present it to you. You are not bound to accept the loan of coure.

NOW>>> if what you signed was the actual loan contact with the loan company that the brokerage was representing, and it was signed by the loan company and also signed by you, then it can be binding.
But since you are saying they can't find anyone at 6 percent it means all you signed was a contract to let them represent you and most likely not a binding loan contract.