Profile picture for terryshells

I have locked in at 4.75% and now broker says it’s 5.65% to close

My broker has locked in rate 4.75% (30yr fixed) at the end of April. The approval process took longer than usual to approve and today I got a call that everything's approved and ready but interest rates are up to 5.65%. She claims rate lock was good only for 30 days. Bank was backed up and did not let her extend as they needed additional papers during the approval process. She never notified me of rate increase possibility till today. This is not making sense to me. What would you recommend I do?

  • June 19 2009 - US
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (15)

Ask your borker to see documentation showing that the rate was locked at 4.75% and  when did it expired.
  • June 25 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I recommend you shop around and take James's advice.  Alert your State's Department of Financial Institutions about your broker's actions.  Your broker could have asked for a lock extension. 
  • June 23 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Request a copy of the Lock Certificate to determine if you were truly locked.

Then tell the Loan Officer you will be filing a complaint with your states Dept of Financial Institutions.
 
NOTE: Last week we had a wholesale lender try to renege on 2 locks for our clients because the wholesale lender did not secure the capital from their investors to honor the locks... the wholesale lender tried to play us with all sorts of BS stall tactics in the hopes we would pass the info off to our clients and they would "just eat the rate".

I threatened legal action on behalf of the 2 clients AND stated I would be posting the "story", naming all names on every mortgage blog and post site I new of.

6 hours later I got a call from the head of the company saying they will fund the loans on their capital.

Personally, I don't think the threat of legal action concerned the CEO much. I believe it was the fact based story of the non-honored rate locks circulating through the Loan Officer community and the effect I would have then the company's future business that "persuaded" the CEO to fund the loans 
  • June 21 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Call the supervisor and ask to see documentation showing that the rate was locked at 4.75% and that it expired.  Question why a rate lock extension was not allowed and why you were not informed.  Either the lock was never locked, or blown or she is padding her commission by playing rate games. Get to the bottom of it. Do not reward bad client service by closing the deal. It is people like this who need to leave the business,
  • June 21 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Ray Stevens
Justin said it right at the start.

FIRE THE BROKER.  Don't reward this broker by still closing.

If they were this incompetent/dishonest about locking, what about the rest of the loan:  fees, etc.

Start over with a Zillow quote.  Ask for a lender with short underwriting turntime, even if you get the same quote as your current broker.

Trust me, the broker, his/her employer and the lender that underwrote the file will be unhappy.  Enough of this and the broker will have to change their ways!.
  • June 21 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

30F Conforming Friday's Mid Day Rate at Par is 5.250% with a 0.100% Cost. .... Good luck, Rudi
  • June 21 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for zag44
Wow, you guys really got screwed! After reading this I'm going to make sure I get my rate lock in writing.
  • June 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for terryshells
UPDATE: My broker faxed me loan commitment today with 5.65% interest guaranteed.  She also said everything's ready for closing and she can make the bank go down to 5.45% but we need to close in next few days.

Is it worth talking to broker's supervisor/manager or wait next week and hope rates will go down?
  • June 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

As First Time Chump mentioned, poor or unethical service is rewarded because you will get today's rates if you switch brokers and you'll start all over.

They know this. That's why they do it. They get away with this. They don't need to depend on referrals. They just keep notching their barrel with victims.
  • June 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for FirstTimeChump
I had a similar situation in that the lender provided no communication.  I thought we were locked.  She never had time to even explain what a lock was so all along I thought we were talking about the 4.75%. I kept emailing her asking if she needed anything from me.  Never heard from her then she calls me when the rates were 5.625% asking "what do you want to do with the rates?"  I contacted her upper management and explained the situation and they worked with me - they didn't get me down to the rate I thought were were at, but they met me in the middle.

The thing about jumping to another lender is you will still get the market rates.

Good luck.
  • June 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Sounds like they really dropped the ball.  You've been given good advice on here so follow your gut reaction to everything said so far.

Good Luck
  • June 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

This could be a true scenario your broker is explaining.  The problem was the lack of communication.  it seems you were not aware the lock is only for 30 days and you thought everything is fine and dandy.

In this market, things can take longer.  However, the broker shouldn't have strung you along until the end, while you were thinking you're going to get a 4.75%.

Unfortunately, rates are no where near 4.75% now.  You'll either have to take what the market is offering, or wait for rates to go down. 
  • June 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Broker would not be able to mark up the locked price, because the additional compensation would be disclosed to you on final paperwork, there is no way for the broker to "hide" it.  So your case seems to be clear mismanagement by the broker.

It is true that some lenders will not allow lock extensions.  Among the most important jobs for the broker includes lender selection and lock management.  Broker failed to protect you and it could have been avoided with either a longer initial lock, or selection of a lender with better turntimes OR better lock extension policies.
  • June 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for terryshells
Thanks Justin. 
 Is there a way to contact lender and determine if this is true?

Can broker mark up the locked interest rate after approval to maximize commission?
  • June 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Fire the broker for incompetency.  Determine if you can still benefit at current market rates.  If benefits are still present, find someone who can handle your transaction and provide better service.
  • June 19 2009
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.