In March 0f 2006, my husband and I refinanced our home. We had a 6.25% fixed rate. We got a call from a lender who told us he could save us a ton of money. We were skeptical at first, but we allowed the broker to come to our home. He was so intelligent and impressive, we trusted him. He told us we would have a fixed interest rate for 5 years of 1.5%, we asked so many questions because we did not know how this would be possible. He advised us to pay an additional $100 and we would have no negative amortization and it would reduce the principle by 7 years.
He showed us an amortization schedule that does not match the one we have in our file. We closed the deal. A month after when we received our first statement, we had 4 options, this was a shock and a state of confusion, I emailed him, called him and he never returned my communications. It was not until 2007 that I contacted the State and than they returned my call. They lied and lied and now we have accrued over $33,000 added to our principle, because we cannot afford to pay the P&I payment at a rate of 8.5 % . Of a mortgage starting at $348,000 + a $50,000 equity loan they made us take out.

Do I have recourse?

WOW... this is kind of a hot potato. No wonder no one wants to respond.

Although you may not have a lot of recourse, there are some moral / ethical standards that were violated.

Do you have a Truth-in-Lending or Good Faith Estimate? If so, does that match the final paperwork that you signed at the closing / escrow? The best thing to do would be to get everything and anything from the transaction together in one place.

Was this "lender" a broker or a banker? Does he have a boss and are they still in business (many have gone out of business). You said that you contacted the state. What state and what department did you contact? Have you tried the Attorney General's office? Is there a department of professional licensing? In the state I am in, the Secretary of State oversees the mortgage brokers.

Unfortunately if you signed the paperwork at the closing / escrow and it was different from what you were promised, you may be out of luck. I wish I could be more positive, but there are a lot of dirtballs in the business. It gives most of us a bad reputation.

I'm afraid at this point, you need to try to refinance if possible. The Option Arm that you were given can rack up interest quickly since you are not even paying all the monthly interest. There may be some equity issues.

If none of this is any help, you may try to call the lender and see if they will do a modification. Explain the story and see if they will help. They may be willing, especially if this is a serious financial hardship for you.

Sorry I'm not more positive. I wish you the best!

LG

Ok, at this point you need a real estate attorney to review all of the paperwork you were given at the night you were doing the paper work.
** and OK, does no one see a read flag on the broker coming to your home? Or is that just me

But an attorney will have to review over all of the paperwork, contracts and more.