Need some sound advice please

[cooper998]

Hello out there,

I am trying to be pro-active and prepare for a problem that I know is coming.

Here are the details of my situation, and I thought I was going into this with my eyes wide open...major bummer.

Anyway, I went to a local highly advertised mortgage broker to see about refinancing my second mortgage and consolidate some debt.

I signed contracts with the broker that stated that once they delivered a mortgage commitment to me their job was done, they were only acting as an independent contractor.

If I did not accept the mortgage commitment for any reason I was still liable for their fee and expenses. Looking back I think that should have been my red flag.

Well, on the day of the signing (May 15th) the mortgage documents were sent to my house, which meant I had plenty of time to read them.

These people are out of their minds! Among other things the conditions required I waive my right to a jury trial if any legal actions are taken by either party...say what!

After reading the documents there was just no way I could sign them, especially the part about waiving a jury trial.

so, i called the loan officer and left him a voice mail telling him i had a problem with the document and i wasn't going to sign them.

about 20 minutes later i received a call back from a guy named ken who told me he was my loan officer's supervisor and trainer and he wanted to know what the problem was.

after i pointed out the conditions i disagreed with due to personal beliefs and convictions he went into what i immediately recognize as the hard sell to close the deal. in fact i told this to him twice.

he told me the documents i had were standard documents and is what everyone is signing, even he himself.

at one point he told me he was going to call the mortgage company and ask about the waiver of a trial by jury.

when he called back about 20 minutes later he didn't mention anything about the jury waiver condition, he straight-up told me that i had already signed the document because when i refinanced my first mortgage i signed on to the same conditions.

so therefore it was illogical that i wouldn't sign them again.

anyway, i think you get the point, he was trying his best to get me to sign and i said no, not under those conditions.

so, now i am expecting a bill from the mortgage broker for probably close to $1500.

i'm not trying to scam anyone and even though i signed a contract i feel that the mortgage broker is dishonest and was trying to pressure me into signing a document that imposes too many burdens and restraints...in short, i was about to get hosed.

i called the state attorney general and was told to file a consumer fraud complaint, etc ,etc.

i did find the following in the broker's state licensing requirements and regulations and was hoping someone could tell me if this could be my relief from the broker's contract which says he has to deliver me a bona fide mortgage commitment ...

"Inconsistent conditions prohibited: no residential mortgage loan commitment shall contain conditions inconsistent with those required by state and federal laws in effect at the time of application, unless such conditions are less onerous to the applicant."

i'm not sure how to prepare for what i know is coming and would appreciate any sound advice i can get...this blows.

thanks in advance,

cooper998

[mrg]

For starters:

File that complaint with the attny general ASAP.

And do a good job with it.

See if you can find an online form to file.

Look for inconsistencies between the papers you were to sign and the state and federal laws.

[charlesa6]

It's just a BS.
They always do that especially when you denied them, you don't want the loan any longer base on the waiver of rights in the loan document.
Tell them to back off that you are going to file the complaint against them for forcing the claim against you because you reject their offer.

[Shoonra]

It may be worth checking your first mortgage to see if, yes, you signed away your right to a jury trial in that document. In which case I'd say you might as well sign the papers they sent you for the second mortgage.

I don't recall hearing of a jury trial arising from a mortgage. Most people really don't expect to wind up in court at all over their mortgages, and neither should you.

[cooper998]

Ok, first I'm going to file a consumer fraud complaint with the attorney general.

MRG - you stated that I should "do a good job with it" (the consumer complaint). by that, do you mean to add as much detail as possible?

At least I had enough sense to write down the details of my telephone conversation with the broker...what an @$$ that guy was.

charlesa6 - I'm definitely with you on not wanting the loan, when i read the conditions and saw the waiver of a jury trial i knew right then that there was no way i could sign that document...period.

Thanks to both of you for the replies, at least now i have something to focus and get started on. I may as well start getting ready now.

[masterduke]

By having a no jury trial waiver in their contract it makes it much quicker to obtain an eviction if you default and steal your house. As Shoonra stated, they are not expecting people to land in court but, these days anything is possible. I wonder what other restrictive lingo was included in both(1st & 2nd) of the mortage contracts? There are some really shady brokers and with the refi "industry" showing signs of slowing(at least in some parts of the country) they would do just about anything to get you on the hook. California leads the nation in home forclosures now. The city of Detroit, MI. now averages 1 in 51 homes in forclosure and Las Vegas, NV. averages 1 in 54 homes being forclosed! There is a crying need for displinary action against the mortage/broker lending co. for their out of control, predatory lending practices. They really helped to create this mess.

[charlesa6]

That's a very stagnant numbers. OCC is given some advice too.

Here is:- http://www.occ.treas.gov/homeloan.htm

[charlesa6]

Fiduciary liability of mortgage broker

This will shield some light to help you understand the impact surrounding the brokers.

One who undertakes to find and arrange financing or similar products for another becomes the latter's agent for that purpose, and owes statutory, contractual and fiduciary duties to act in the interest of the principal and make full disclosure of all material facts. "A person who undertakes to manage some affair for another, on the authority and for the account of the latter, is an agent." In re Estate of Morys, 17 Ill.App.3d 6, 9, 307 N.E.2d 669 (1st Dist. 1973).
A mortgage loan broker is an agent procured by the borrower to obtain a loan. Wyatt v Union Mtge. Co., 24 Cal.3d 773, 782, 157 Cal.Rptr. 392, 397, 598 P.2d 45 (1979) (a mortgage broker owes a fiduciary duty of the "highest good faith toward his principal," the prospective borrower, and "is 'charged with the duty of fullest disclosure of all material facts concerning the transaction that might affect the principal's decision'"). Accord: Allabastro v. Cummins, 90 Ill.App.3d 394, 413 N.E.2d 86, 82 (1st Dist. 1980); In re Dukes, 24 B.R. 404, 411-12 (Bankr. E.D.Mich. 1982) ("the fiduciary, Salem Mortgage Company, failed to provide the borrower-principal with any sort of estimate as to the ultimate charges until a matter of minutes before the borrower was to enter into the loan agreement"); Community Fed. Savings v. Reynolds, 1989 U.S. Dist. LEXIS 10115 (N.D.Ill. August 18, 1989); First City Mtge. Co. v. Gillis, 694 S.W.2d 144, 147 (Tex.Civ.App. 1985) (requirement of fiduciary duty forbids conduct on the part of the broker which is fraudulent or adverse to his principal's interest and also imposes duty of full disclosure of facts material to his principal); In re Russell, 72 B.R. 855 (Bankr. E.D.Pa 1987); Langer v. Haber Mortgages, Ltd., New York Law Journal, August 2, 1995, p. 21 (N.Y. Sup.Ct.).
Many predatory practices of mortgage brokers, including particularly the receipt of "yield spread premiums," are arguably violations of fiduciary duty. Other promising candidates include repetitive refinancings of little or no ,benefit to the borrower. Note that if the mortgage lender is on notice of the breach, or induces it through the payment of a yield spread premium, the taint may extend to the lender.

[mrg]

Originally Posted by cooper998

MRG - you stated that I should "do a good job with it" (the consumer complaint). by that, do you mean to add as much detail as possible?

No.

State facts, not opinions, concisely, simply, and clearly.

Do not be argumentative, judgemental, or say anything that can be used to create controversy.

Simple statement of the facts, based upon a solid premise.


Like I said, for starters:

Look for inconsistencies between the papers you were to sign and the state and federal laws.

[cooper998]

Originally Posted by mrg

No.

State facts, not opinions, concisely, simply, and clearly.

Do not be argumentative, judgemental, or say anything that can be used to create controversy.

Simple statement of the facts, based upon a solid premise.


Like I said, for starters:

Look for inconsistencies between the papers you were to sign and the state and federal laws.

mrg,

well, i've probably hosed myself then. i've got so much on my mind and what was intended to be an action to provide a bit of breathing room suddenly seems to be spiraling out of control.

acting out of emotion (and a lot of stress) versus sound reasoning i felt i had to do something so i filed a complaint and the narrative falls way outside the guidelines you provided. talk about a having a bad feeling.

so, i'm thinking that i need to take a deep breath, relax, and start preparing for the worst.

the last thing i want is to have to rely on a lawyer, can't afford it for one thing. i've tried to read through the forum to piece together what i can expect to be coming down the road.

i'm thinking i need to get spun-up on the terminology, sequence of events, and stuff like that.

would you have any suggestions on a good starting point, there is so much i'm going to need to learn that i don't even know where to start.

i've never been in a situation like this and i think that once i'm out of the dark and can see what's going on i won't be quite so anxious.

regardless, i still wouldn't sign the thing if i had to do it over again...my rights aren't for sale or lease...but i do believe that i would handle the situation differently.

thank you for the information. i could literally kick myself that i went ahead and filed that complaint but hey, it won't happen again.

well, i guess this concludes lesson #1...gurm