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Dannotary
California
265 Posts |
 Posted - 09/17/2011 : 07:08:36 AM
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| Used to love those pre payment penalties too. Borrower calling loan agents and reminding them that they said there was no prepayment penalty. Agent says, thats right, but there is a 'early closure fee'. Borrower,'why didnt you tell me, you knew what I was asking'. Agent: 'you said pre payment penalty, you didnt ask about early closure, if you would have asked I would have told you'. Isnt that the same thing? (Very cute huh?) See what I mean. |
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Dannotary
California
265 Posts |
Posted - 09/17/2011 : 06:59:11 AM
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| They dont misinform as much these days. Some double talkers are still out there, and they are whinning about the little regulation with underwriting they have to do now. It is good that they are sending the HUD in advance of the signing appt now. Prior to 2006 I have been at literally 100's of signings where people thought they were getting what they asked for, which was a 30 yr fixed fully amortized loan and it ended up being a fixed int only for 3-5 yrs. I could hear the agents say things like, 'yeah, fixed for 3 yrs' (they didnt finish the sentence when borrower initially asked at the onset). Lovely. So the people would acquiese and sign anyway with lots of frustration. Or they were told that they didnt do 30 yr loans anymore, or that they didnt exist, or 'noone does that anymore, thats stupid'. The slickest liars were always from Orange Co or San Diego Co. Often people would notice that their income is stated higher than what it really was too, but not by them. The answers given were also very interesting on this. I dont blame the borrowers at all for the credit and mortgage crisis we find ourselves in today after all that I have seen over the years. Dont get me started. |
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LindaH
Florida
1754 Posts |
Posted - 09/10/2011 : 09:51:59 AM
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"Many many times I would arrive at the borrowers' home, start the closing, and have them say something like "but this was supposed to be a fixed rate" or "but we never agreed to a prepayment penalty""
I had this situation 2-3 years ago - piggyback loans and borrowers were adamant they were to be fixed with no prepayment penalty. Unfortunately, they came in adjustable with substantial prepayment penalties on both...
LO gave them the same line - "that's the best we could do for you right now"...(I'm grumbling and biting my tongue) - he then says "there is absolutely no prepayment penalty" - Now, These people had voiced their intentions to me that they had a piece of property for sale so they had all intentions of paying off that HELOC well in advance of the three years so when I heard the LO say that I'm, silently, pointing to the paragraph in both Notes that spells out the prepayment penalty in black and white (and there was NO rider removing that language) - so she reads it to him - his explanation? "Oh, that won't apply...we're going to refinance you in 3 years before that comes due and my company is going to waive their fees so it will offset the penalty" - I damn near fell off my chair!! And you know what? They signed!!!
Wonder what happened when they called to refi near the 3-year mark and find out that (a) the company is out of business, or (b) Junior with all the promises no longer works with the company and wasn't authorized to make those kind of promises. Or, when they paid off that second and got nailed with the prepayment penalty.
Sometimes you can't save people from themselves no matter how hard you try.
Linda
http://www.notary.net/websites/LindaHubbell
http://www.columbiacountynotary.webs.com |
Edited by - LindaH on 09/10/2011 09:55:29 AM |
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dionaea
Tennessee
21 Posts |
Posted - 09/10/2011 : 08:21:48 AM
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This scenario used to occur a great deal about 4 to 6 years ago. There was a period of at least a couple of years when the market was booming, and every homeowner was being bombarded with cold calls and the media was filled with "amazing-but-true" refinance offers. This was the time period when borrowers were being pushed, pressured and just plain lied into adjustable-rate mortgages and prepayment penalties. As a notary, I had to bite my tongue so many times, but at least I did make sure the borrowers grasped the facts of the documents they were signing by carefully pointing out the facts of the loan terms.
Many many times I would arrive at the borrowers' home, start the closing, and have them say something like "but this was supposed to be a fixed rate" or "but we never agreed to a prepayment penalty" or "what's a prepayment penalty" or "but it's supposed to be 7.25%, not 8.50% interest" or similar shocked comments. I'd tell them to call their loan officer, which they would try to do. If they managed to reach the loan officer (not to be sexist, but most of the loan officers involved in these episodes seemed to be young men in the cases I encountered and reminded me a great deal of the boiler-room cold call people who try to sell you magazines or vacation trips over the phone), he would sweet-talk them into going ahead with the closing. I heard a lot of "Oh, I tried, but this is the best we can do with your credit rating right now. Don't worry about it. Just make your payments on time for six months, then call me and I'll be able to get you right into a fixed rate.", or "...a lower rate.", or whatever the loan officer had to say to convince the borrowers to sign the new worse-terms loan. Of course by the time the borrowers had gone through all the exhausting paperwork process, with the inevitable drawn-out "we just need one more document...", "yes we did say we only needed one more document, but we do need another document after all...", the borrowers were stressed, pressured, and had been counting on the loan for a couple of months or longer. They were usually in no position to say no and start through the long process again, and often it sounded like the loan officer had already convinced them he was their best buddy and their last best hope of refinancing their mortgage, when actually the loan officers were just interested in maximizing their own paychecks and did not care at all about the future consequences for the borrowers.
That said, I will state that for the last couple of years I have had NO closings where I felt the borrowers were misinformed or misled! The loan officers, both men and women, seem genuinely caring and trying to do a good job for both lender and borrowers.
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jbelmont
California
3106 Posts |
Posted - 09/09/2011 : 11:30:03 PM
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Have you had a signing where the borrower was surprised to see the information on the docs? Did amounts and rates not add up? How often do lenders misinform, or not inform borrowers about important information on loan documents? What are the common problem areas?
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How often do lenders misinform borrowers?
