New mortgage company raising my mortgage

[Karl thompson]

So we almost lost our home years ago and hired a company to facilitate the refinancing process with the bank. They also made sure the bank didn’t do anything shady. Throughout the long process, including submitting proof of income, we were able to refinance at a low fixed rate, thus saving us from losing our home. Well, my mortgage was bought by a new bank and they sent us a letter that my mortgage will go up every year for the next 4 years. My question is, can they break the agreement that I had with the previous mortgage company?

 

[LdiJ]

So we almost lost our home years ago and hired a company to facilitate the refinancing process with the bank. They also made sure the bank didn’t do anything shady. Throughout the long process, including submitting proof of income, we were able to refinance at a low fixed rate, thus saving us from losing our home. Well, my mortgage was bought by a new bank and they sent us a letter that my mortgage will go up every year for the next 4 years. My question is, can they break the agreement that I had with the previous mortgage company?

How are they raising the mortgage? Are they trying to raise the interest rate? The escrow amount? What? Have you talked to the company that originally helped facilitate things?

 

[Karl thompson]

New bank raising my mortgage

They are raising the internet rate each year for the next 3 to 4 years. I have not reached out to the old mortgage company since I don’t know if we have a leg to stand on

 

[Karl thompson]

And no we have not reached out to the company that facilitated the refinancing.. I wanted to find out if there something that can be done.. if there is, then I’ll re-hire them or hire another company to fight this. Otherwise I’m not going to be able to afford my mortgage

 

[xylene]

Are you sure you have a fixed rate mortgage?

Have you read all of the mortgage origination documents on your refinance?

 

[adjusterjack]

And no we have not reached out to the company that facilitated the refinancing.. I wanted to find out if there something that can be done.. if there is, then I’ll re-hire them or hire another company to fight this. Otherwise I’m not going to be able to afford my mortgage

Agree with Xylene.

Read your loan contract.

You might have gotten yourself an adjustable rate mortgage without realizing it.

And that likely happened if you didn't read and understand your papers before signing them.

 

[Taxing Matters]

My question is, can they break the agreement that I had with the previous mortgage company?

Short answer is no. They bought the mortgage with whatever terms the mortgage agreement has. The question then is what the exact terms of the mortgage were. There are some mortgage products out there in which the mortgage rate changes periodically. You may have got such a loan without really realizing it. The fact that you faced foreclosure suggests you had not been keeping up with your payments and likely had damaged credit when you refinanced. In that situation, it would be unusual to get a long term mortgage loan at a "low fixed rate." If the initial rate was really low in that situation, I'd typically expect to see a provision in the loan where it may go up later. So get out your loan documents (I hope you have a copy) and read through them carefully to see what you agreed to. I realize that won't be easy reading; those documents can be pretty dense. But in those documents should be a Truth in Lending Act disclosure form. A prototype version of that form is available from the Federal Trade Commission here:
https://www.ftc.gov/sites/default/files/documents/reports/improving-consumer-mortgage-disclosures-empirical-assessment-current-and-prototype-disclosure-forms/samplecurrentforms.pdf

This form provides a summary of the financing terms of the mortgage to make it easier to understand and to compare mortgage offers. You will see on the form a box to check if the loan has a variable rate. So, as a start, before digging into the fine print of the mortgage documents, see if the TILA disclosure form indicates that the rate is variable. Then from there read the actual finance terms in the mortgage agreement itself. It should not differ from what the TILA statement says.

 

[adjusterjack]

Live link for OP's convenience.

https://www.ftc.gov/sites/default/f...otype-disclosure-forms/samplecurrentforms.pdf

 

[PayrollHRGuy]

I seem to remember after the 2008 housing crash there were several banks that agreed to convert adjustable rate mortgages to fixed rate. In all cases this was not done through a true refinance it was just the bank waived there normal adjustments. These may have not have all been binding if the mortgage was purchased by another bank.

This may well NOT be the case with the OP but it is worth checking out.

 

[MuDoggie1]

So we almost lost our home years ago and hired a company to facilitate the refinancing process with the bank. They also made sure the bank didn’t do anything shady. Throughout the long process, including submitting proof of income, we were able to refinance at a low fixed rate, thus saving us from losing our home. Well, my mortgage was bought by a new bank and they sent us a letter that my mortgage will go up every year for the next 4 years. My question is, can they break the agreement that I had with the previous mortgage company?

Is there anything else in the letter other than "my mortgage will go up every year for the next 4 years"? Did your taxes or insurance go up? Did you refinance or did you sign a hardship modification? Did you agree to a step rate or negative ammortization clause?

No, the new mortgage company can not arbitrarily change the terms of your mortgage. They can raise your PAYMENT if there are provisions for escrow or other increases in your terms. They can increase your MORTGAGE if you agreed to this or the potential for increase in your contract.