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mortgage
Consumers share their lending woes

Bankrate asked consumers to share their stories about lender troubles -- and boy, did we get an earful. Below are articulate first-person accounts of Murphy's law as it applies to mortgage-related mishaps. Most are from consumers who appear to have good reason to be disgruntled with their lenders. But since we didn't try to get the other side of the story, we used fictitious names to protect the guilty.

We also got a couple of letters from mortgage professionals in the industry -- one that will shock you with its candid confession of unscrupulous practices used in the industry. And finally, we close with the tale of a woman who experienced woes firsthand as a lender to her daughter.

In the process of sharing their unfortunate experiences with loan transactions, these consumers impart some pearls of wisdom.

Closing nightmare

Having gone into our lender's office to go over all the details associated with our loan, we were confident we were doing business with knowledgeable professionals.

We had received our confirmation letter the day before we closed that outlined important details, such as the amount of each loan -- one for new construction and one for 30-years -- closing dates, down payment and monthly payment. All looked correct.

So the next day at the title company's office, we reviewed the numbers with our title rep. As we were signing our papers, we noticed there was a $370 discrepancy in the monthly payment from the commitment letter we had received just the day earlier. It was higher than the confirmation letter had outlined.

Our title rep ran the numbers for us and it seemed our lender applied the wrong rate. So, amid mounds of paper, our title company rep called the lender and they said, "Oh, sorry, it was a mistake," which will now cost us an additional $370 per month.

So, in the end, we asked our lender, which word in your commitment letter is more important, "approximately OR professional," and we found out the hard way, it was approximately.
-- K.A.
San Antonio, Texas

Online lender headaches

Back in 2002 when we were buying our first house, we got pre-approved from an online lender. Then, once we made an offer on our house, we went back to the online lender for the loan.

They locked in our rate with our application, and said there would be no problem in closing in 20 days. A week before the close the online lender contacted us to say that our loan was not, in fact, locked (after interest rates had gone up!) because they could not write a loan in Santa Clara County using that lender (the house had been located in Santa Clara County the whole time) and they had to lock in our loan at a new rate.

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We fired them, hired a mortgage broker to find our loan, and went on our pre-scheduled vacation to Hawaii. The broker locked in our loan and closed in about five business days. There is no substitute for personal service.

And ... the low fees allegedly charged by the online lender are offset by the fact that they do not have the lowest rates.
-- Elizabeth Potts
Weinstein San Jose, Calif.

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