Wronged by Mortgage Broker

[nabster]

What is the name of your state? New York

All, this is my first post here, so I apologize in advance if I am being presumptious with my request for advice. I believe that my brother & I were wronged and exploited by a Mortgage Broker during a recent apartment purchase in Manhattan , New York. We are looking into refinance as I type, and also looking to submit the following complaint to the NY State Bank Board, the NY Attorney Generals Office, the BBB, and as many TV, Radio, NewsPaper stations we can. I would appreciate if anyone can provide me with any other suggestions.


Here is the summary of our complaint:

•Mortgage Broker (SMBroker) did not do due diligence in providing us with information in a timely manner. We were seldom informed of events regardless their significance and consequence.
•The terms of the loan were often misrepresented and altered – despite previous “guarantees”. Furthermore, these changes were only realized as a result of our attentiveness and thorough examination of documents (and not SMBroker’s due diligence). The manner in which this was done appeared to be premeditated and intended to deceive.
•SMBroker appeared to work with no sense of urgency, and often seemed to be unnecessarily prolonging each step in the process.
•It appears that SMBroker frequently colluded & shared specifics of our case with members from the sellers party (including the seller, sellers agent, and sellers attorney), and in doing so violated our confidentiality/privacy.
​

As a whole, SMBroker failed to provide the services they were being compensated for. It appears that SMBroker attempted to mislead, deceive and defraud their client (e.g. the Interest Rate Bait-and-switch). The following sequence of events has been documented in an effort to demonstrate this:


Click here for a sequence of events:

 

[HomeGuru]

What is the name of your state? New York

All, this is my first post here, so I apologize in advance if I am being presumptious with my request for advice. I believe that my brother & I were wronged and exploited by a Mortgage Broker during a recent apartment purchase in Manhattan , New York. We are looking into refinance as I type, and also looking to submit the following complaint to the NY State Bank Board, the NY Attorney Generals Office, the BBB, and as many TV, Radio, NewsPaper stations we can. I would appreciate if anyone can provide me with any other suggestions.


Here is the summary of our complaint:

•Mortgage Broker (SMBroker) did not do due diligence in providing us with information in a timely manner. We were seldom informed of events regardless their significance and consequence.
•The terms of the loan were often misrepresented and altered – despite previous “guarantees”. Furthermore, these changes were only realized as a result of our attentiveness and thorough examination of documents (and not SMBroker’s due diligence). The manner in which this was done appeared to be premeditated and intended to deceive.
•SMBroker appeared to work with no sense of urgency, and often seemed to be unnecessarily prolonging each step in the process.
•It appears that SMBroker frequently colluded & shared specifics of our case with members from the sellers party (including the seller, sellers agent, and sellers attorney), and in doing so violated our confidentiality/privacy.
​

As a whole, SMBroker failed to provide the services they were being compensated for. It appears that SMBroker attempted to mislead, deceive and defraud their client (e.g. the Interest Rate Bait-and-switch). The following sequence of events has been documented in an effort to demonstrate this:


Sequence of Events:

• 7/30/04:
  •My brother & I (Buyer1 & 2) retained a real-estate attorney (BAttorney)​
• 9/16/04:
  •Our bid of $266,500 for the apartment was accepted by the seller (Seller)
  •The sellers agent (SAgent) referred us to a Mortgage Broker (SMBroker)
  •Our case was assigned to a representative at the SMBroker (SMBrokerRep)
  •SAgent herself owns multiple units in the development financed through SMBrokerRep​
• 9/17/04:
  •We started shopping for mortgage rates through various brokers and direct lenders (including SMBrokerRep, Emigrant, Astoria, NCB etc).​
• 9/21/04:
  •SMBrokerRep pulled credit reports on both buyers, and offered us a rate of 4.625% for a 5/1-ARM with 0 points, if we were both on the loan. Since SMBroker had come very highly recommended, had significant knowledge of the development (from having financed other units in the same development), and most of all, their rate was in line with the rates we had received from other lenders, we decided to stop shopping around and go with SMBroker.​
• 9/22/04:
  •We signed the purchase contract. In the contract the sellers’ attorney (SAttorney – also the sellers son) included a mortgage contingency tied to SMBroker.
  •At that point, we put into a 10% deposit of $26,650 into Escrow.​
  
  
  
• 10/14/04:
  •We submitted a completed SMBroker application​
• 10/19/04:
  •We submitted our board/co-op package to the SAgent​
• 10/20/04:
  •We paid SMBroker a $650 application fees via Credit Card​
• 10/22/04:
  •SMBrokerRep confirmed that we were locked in at 4.625% for a 5/1 ARM with 0 points. At this point, he scheduled the appraisal.​
• 10/26/04:
  •The appraisal was done.​
  
  
  
• 12/6/04:
  •We finally received a commitment letter from Emigrant Savings Bank. Upon close review of the letter we noticed that the interest rate was 5.5%, significantly higher than what we had locked in at.​
  
  
  
• 12/22/04:
  •Immediately showing annoyance and discontent at our appeal, SMBrokerMD proceeded to inform us that the original lock-in was with North Fork Bank who had decided not to process the application and that the next bank they approached, Emigrant, had offered this higher rate. This was news to us; at no point had we been notified of any such development.
  •Furthermore, SMBrokerMD refused to talk to us anymore, and gave us the ultimatum to take it, or leave it.​
  
  
  
• 12/28/04:
  •We signed the commitment letter and requested SMBrokerRep to proceed with preparing the necessary closing documents.
  •We also obtained a written copy of the lock-in, valid until 02/29/2005 at the rate of 5.5% for a 5/1 ARM and a margin of 3.0 points over the index.​
  
  
  
• 01/17/05:
  •SMBrokerRep called to inform us that the bank was ready to close. However, they would only do it at a rate of 5.75%. The reason for this increase was that the bank now had information that they had previously overlooked and could not do it at the most recently promised rate of 5.5%.
  •We informed SMBrokerRep that we were going to take our business elsewhere.
  •At this point, we received notification from our attorney that the seller was •ffering us $500.​
• 1/18/05:
  •SMBrokerRep called to inform us that the bank was willing to offer us the following options:

  ?Either close at 5.75%
  ?Or pay $2750 to buy down the rate to 5.5%.​

  •SMBrokerRep also mentioned that as an incentive to close immediately, the Seller was willing to offer us $500 towards closing costs. This continued to confirm our suspicion that SMBroker was discussing our case with the Seller, and thus violating the client confidentiality/privacy.​
  
  
  
• 1/24/05:
  •We agreed to close at the rate of 5.75%​
  
  
  
• 02/01/05:
  •At this time, we were presented with yet another surprise. The closing documents indicated an ARM margin of 3.75 points. All documents up to this point clearly indicated a 3.0 point margin. At no point were we notified of an increase. All present at the closing contacted SMBrokerRep who claimed to have no knowledge about this increase in margin.
  •The bank’s attorney and the management company threatened to impose significant “adjournment fees” if we did not close immediately. Furthermore given the nature of the problem, it was unlikely that the matter would be resolved in a timely fashion, thus putting the security deposit at risk once again.
  •Nonetheless, due to the cascading dependencies and pressures, we once again yielded and agreed to close.​

**A: when I have some extra time this summer, I'll read your post.

 

[nabster]

**A: when I have some extra time this summer, I'll read your post.

Thanks for quoting my entire thread and making it seem even more overwhelming, and also, appreciate the warm welcome