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LeeAnnMemphis · Mar 21, 2006, 06:12 AM

Hey guys,
SO I was talking to a mortgage broker about re-financing my house. My situation is difficult and my credit isn't great, so I haven't had any luck at the banks. I told this guy my circumstances, he said he could help. Anyway, his final offer was a re-fi that would cost me $6,500 in closing costs, and I would get $6,000 cash. Then a second loan on top of that which would cost me another $1,000 in closing costs, and I would get $9,000 cash. So, before the appraisal was done, I changed my mind. I just couldn't rationalize spending $6,500 to get $6,000. He said my credit (642) was too bad to get any other offers. And since I changed my mind, he said he is now going to BILL me for his time that I wasted. Can he do that?

ScottGem · Mar 21, 2006, 07:38 AM

Unless you entering into a contract with him, I don't think so. I believe there is a federal law that gives you a 3 day cooling off period for any such contract and that would be AFTER you signed the papers. So cancelling before shouldn't do anything.

fredg · Mar 21, 2006, 08:01 AM

Hi, LeeAnn,
There is nothing to stop him from actually sending you a bill; whether it's really legal or not.
Wait and see if you actually do receive a bill. If you do, then call the Better Business Bureau in Memphis. Talk with them, see if they can help you resolve it. You didn't sign any contract, so Contractual Law wouldn't seem to apply here.
Here is a link to Mortgage Companies in Memphis, members of the BBB:
http://www.midsouth.bbb.org/commonro...=99011&code=wq
If you wish, in the meantime, check out the list, see if the particular mortgage company is on the listing as a member of the BBB.
Best of luck.

Fr_Chuck · Mar 21, 2006, 08:02 AM

As scott said, not unless you signed a contract with him, at the terms he quoted I would say he was on the somewhat shady side, sounds more like terms your local loan shark at the pool hall may want

Even the terms of the loans do not make sense and is far too much for even bad credit.

That is the life of a mortgage broker, they may work hours and hours and deals fall though, they only make money after the deal closes.

If you signed a contract and "hired" him to find you a loan, then you may have some charges apply. I would read carefully all the papers you signed.
Often some of the less than good brokers may have clauses, since that is where they would make their money when you cancell the loan, but these are less than ethicial people if they are not up front of the cost.

I would not pay unless you have a contract to pay, then if he actually bills you, I would report him to the Better Business Bureu and to the state licencing board in the state he operates in, and also in TN where you are at.

CaptainForest · Mar 21, 2006, 01:16 PM

I agree with Scott et all.

Provided you didn't sign a contract, you won't have to pay.

Dr D · Mar 22, 2006, 08:53 AM

As the previous posts have stated, this Broker is a Low Life. If he persists, consider filing a complaint with your State Department of Banking which (at least in AZ) regulates mortgage lenders. A 642 credit score by itself should not put you in a sub-prime category. Other factors such as debt/income ratio and loan to value ratio affect the final outcome. FHA is more lenient on credit than FNMA/FHLMC. Unless you can improve the rate/terms of your existing mortgage, it is best to leave it alone, as you are paying closing costs on old money to gain a relatively small amount of new money. Have you tried to get a Home Equity Line of Credit from your bank or credit union? If that fails, contact a reputable broker to see if he/she can find a stand alone 2nd that would provide the cash that you need. I hope this helps.

LeeAnnMemphis · Mar 25, 2006, 01:36 PM

Well, I got the invoice today for $325. I told him you can invoice me all you want, it's not like I really have extra money lying around to pay it. He put down his going rate as $75 per hour.

ScottGem · Mar 25, 2006, 04:46 PM

Do you have a friend who is a lawyer? If so, I would ask him to send him a letter saying that you are going to sue him for harassment.
I would also contact whatever agency oversees mortgage brokers in your area. Unless you had a contract, what he's doing is unethical at best.

Let them handle this creep.

fredg · Mar 26, 2006, 08:16 AM

Hi, LeeAnn,
Have you called the Better Business Bureau?
They may, or may not, be able to help you. It's worth a try. At least let them know what is going on, and the business name.
I would also talk with a lawyer, or a friend who is one, let them handle it for you.