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FHA Case Number held hostage - We never signed paperwork

Profile picture for redwingsforever
We have an accepted offer on a house.  As part of the process, we provided a letter from a first mortgage broker that we would be approved for a loan for our offer price. 

After the offer was accepted, we got an estimate on closing costs from the first mortgage broker and they appeared very high.  We never signed the estimate.  We never signed a loan app.  After getting the estimate from the first mortgage broker, we got two other quotes and went with one of the new quotes.  We sign paperwork with our selected broker and she finds out that the first mortgage broker has taken the FHA case number out and had the appraisal done.  Again, we never signed paperwork for a loan with this first guy.  I called the first mortgage broker and he tells me that he has done 90% of the work and I have to pay him for all the work he's done or he won't release the case number.

Any comments?  I can't believe what he has done is legal.  We are trying to assess where to go from here.
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August 30 2009 - Southwyck

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Profile picture for Security National
The lender you are working with needs to contact the nearest HUD field office and file a complaint against the first company. 
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August 30 2009
Profile picture for 203K Specialist
As soon as hud is contacted it will be resolved.
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August 30 2009
Profile picture for MN Mortgage Mom
You may be able to contact HUD for further guidance at: 202-708-1112.  From their website:TRANSFERS OF CASE NUMBERS BETWEEN LENDERS.
A. New Lender. Lenders are expected to cooperate in the transfer of case numbers. At the request of a borrower, the case number is to be assigned to the new lender using the Case Transfer function in FHA Connection. The transferring lender is not entitled to a fee for the transfer of a streamline refinance case number, regardless of the stage of processing the loan is in. The transferring lender may be entitled to any lock-in fee collected from the borrower at the time of application. The transferring lender is required to provide the new lender with the appraisal but is not required to provide any processing documents. If processing documents are transferred, the fee for providing these documents is to be negotiated between the lenders. No separate charge to the borrower is authorized for this transfer
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August 30 2009
Profile picture for Bob Lowery
It is very easy to assign FHA case numbers.  That broker is just a tad on the unprofessional side.  I think this link below will help with the transfer. Good luck.

HUD
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August 30 2009
Profile picture for Mike Politzer
I had something like this just come up at the end of last week for the first time in my experience. The house my clients are in contract on is tied to an older (2/2009) case number with a different lender than the one I'm planning on going to. The reason this is more significant now than before is the my current lender can't/won't send out the Reg Z disclosures until the case number is transferred, meaning we can't take the appraisal fee from the client until that's done.

My processor contacted HUD late Friday and they weren't helpful, pointing us back to the original lender (which will be a research task that could take a while).

If anyone has had a similar experience and can advise us we will all be very grateful.
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August 30 2009
 
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DiscussionFHA Case Number held hostage - We never signed paperwork
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