I will try to keep this short but include as much detail as possible.

4 years ago we declared bankruptcy but kept our house and a second mortgage. When I say we kept them, I mean we simply continued to pay on them as the lawyer suggested that we not reaffirm the loans.

3 weeks ago my wife decided to go to a popular site for refinancing and mortgages and put in for refinancing. One particular company contacted us and she started the process with them. She informed them up front that we had a bankruptcy 4 years ago and the the house and 2nd mortgage were discharged but we kept paying. She also informed them that we were a consistent 1 month behind on the mortgage payment. The agent indicated that this shouldn't be a problem so she agreed to allow him to pull our credit report. After doing so, he said he saw no problems and sent us paperwork to sign in order for us to move forward.

We signed the paperwork and he told us that we now needed to spend $445 for a home appraisal and if that came through at the amount we said the house was worth, everything was good to move ahead. So we paid for the appraisal and then were told that we now needed to do a phone conference with a company that they use, Credit Plus, and our mortgage company. Our mortgage company verified that the debt was discharged as we said and that we had been making monthly payments on the house for the last 4 years but we were one month behind...as my wife had already told them on the initial consultation. The appraisal came through and then we didn't hear from the agent so my wife sent him an email and said something along the lines of, "I suppose since we haven't heard from you, the appraisal or the conversation with Credit Plus didn't work out." The next morning, the agent replied saying that the appraisal was fine and what we were looking for and that everything was "good to go". He then finished off by saying he will call in the afternoon and we will finalize the structure of the loan and close by the end of the week.

The afternoon came and went and he never called. Around 5 pm we get an email from someone else from the company and all it says is that we can view the status of our loan and any updates by going to their website and logging in. So we logged in and to our surprise, it was a form letter that said they had withdrawn the application due to our being late with the mortgage payments. That was it. No common decency of letting us know we had been denied even though we had been told that morning that everything was "good to go".

So...they had pulled our credit report and decided it was good enough to move forward and then had us pay for a home appraisal. The appraisal was actually done on 2/25/15...on 3/2 we did the phone conference...on 3/3 we were told everything was good to go. 5 hours later, we were sent a cheesy email that led us to a site that told us we were denied. To make matters worse....and this is what is really pissing me off now...This past Saturday, 3/7/15, we got a policy change in the mail from our home owners insurance that says that this mortgage company is now listed as the mortgage holder on our house...this letter was dated 2/25/15....the day of the appraisal...before they even had the results of the appraisal. So this company called our insurance company and had them add themselves as the mortgage company before they had the results of the appraisal, before anything was finalized, without our consent to do so, and before we had signed any legal papers for the loan then to top it off...They wound up denying us anyway.

So now we lost $445 because they had told us that the appraisal was all that would hold us up AND our insurance company changed the policy without our consent to do so.

Do we have any legal recourse in any of this? Or, is this all legal but just poor business practice? I am wanting to know if there is anything I can do about this before I contact them about it. At the very least I would like them to fix my insurance problem and pay us back for the appraisal since that was done under false pretense as far as I am concerned. This is in the state of Pennsylvania.

And please...spare me the lectures on the mistakes we made...We feel stupid enough already. I realize it now and have learned from this but it is too late to do anything about it now other than trying to clean it up.

Thanks for any help.

All legal, they should not have changed the mortgage holder on the insurance, until it was final. But it appears it was on the track to be final till a last review was made.

Also please note that the broker for these do not work for the company but just works for themselves trying to sell the mortgage to a company for a commission. With a bankruptcy just a few years old, and late on almost all payments, I am surprised anyone even talked to you. (sorry but today's market is harder)

There is no recourse, assuming a real appraisal of your home was done, a company came out and a man actually looked at the home.

Agreed. You were legally scammed. Happened to me getting a first mortgage about 30 years ago - the loan hustler, who is a contractor on his own, not an employee, runs off with his cut of the application fee, leaving us to deal with the loan company.

Thinking about it again, I would contact the CPD of the AG's office for PA.
All that does is generate a letter to the loan company demanding a response, but on rare occasions, such as if there have been other such complaints, the AG does something.
(I did that once and the company response was a total lie, so I let it drop before I busted a gut. It was a small amount of money, but I did it on principle. I think it takes a lot of other people along with you to get anything done.)

I want to be clear on something....the late payments were only on the initial mortgage which was discharged and it was only one month behind. The 2nd mortgage and all credit cards and utilities have been up to date since the bankruptcy.

The money itself isn't the issue. $445 isn't the end of the world but it is the idea behind all of this that has me really annoyed...that they could operate like this and get away with it. I am sure that if they have done it to me, then they have done it and will do it to others.

I will try to keep this short but include as much detail as possible.
... And yet you repeated yourself repeatedly. :(

Anyway, I would ask them to reimburse you for the cost of the appraisal. We did a re-fi application recently, they went back on their word like this, and when we demanded that they pay us the cost of the appraisal, they made it good.

I suspect that the transfer of the loan to another mortgage company was just a coincidence. And, in any event, I fail to see how you were damaged by that transfer.

And yet you repeated yourself repeatedly. :(

I know. It was late when I typed that out and I was annoyed. I got ahead of myself.


I suspect that the transfer of the loan to another mortgage company was just a coincidence. And, in any event, I fail to see how you were damaged by that transfer.

Read it again. I did not say that the loan transferred to another mortgage company. The mortgage company we were trying to work with told our home owners insurance company (Allstate) that they were now the mortgage holders on the house and had Allstate remove the other 2 companies from the policy before we were even approved. Since they then denied the loan after doing this, we now have to fix this change in the policy and set it right with the insurance company.

Not you them! They will correct their own mistake(?), if indeed you are denied refinancing, and from experience I can tell you that it will take 7-10 business days. 3 weeks in real time. Relax and get further clarity from the guy you have been dealing with. I know of no instant results from any business process.

We lodged a complaint with the company about how this was handled and I just got off the phone with someone who claims to be head of the complaint department. He told me he was upset with how some of this was handled (especially the impersonal email about being denied) as it makes them look bad. He then told me he will need to do a deeper investigation into it all that will take a day or 2 for him to examine emails and listen to phone calls that were recorded. He said he called because they do take complaints seriously and he wanted us to know they are working on it.

So...not that I believe him completely but at least they are looking this over again. I would like to at least get the appraisal fee back. If he finds that the agent followed incorrect procedures, it will help us out.

The person you call an 'agent' ('loan originator'?) is someone with practically no knowledge of loans, who works on commission, and who disappears the instant they get the commission. You can't believe what they say!