mortgage brokers (changing terms)

[clarkfan1979]

I am in the process of doing a cash-out re-fi on a rental property. My step-sister is a real estate broker and I am using her "trusted broker" who is also the accountant for her real estate business. It's a husband and wife team. The husband works the deal and the wife collects all the paperwork. I mostly communicate with the husband.

I signed a letter of intent with terms last Friday (09/20) and it went to underwriting. Thursday (09/26) my mortgage called me and said that he cancelled the original deal because he got me a better deal. He said the new deal saved me $1200. I agreed over the phone  on (09/26) and I signed a new deal on (09/27) and it immediately went to underwriting.

Original deal

4.56%
$753 charge for points
Title Fees $1169

New Deal
4.50%
No points
Title Fees $1619

I asked my mortgage broker why the title fees went up by $450. Instead of the husband personally replying, he had his wife reply on his behalf. This is the first time that he has done this. I have communicated with them both separately via email. However, I have never had one of them communicate for the other person on their behalf.

The wife then said this is what my husband said, "no change in title fees the original quote from quicken was missing some fees.  Title fees will remain the same it's a state promulgated rate and the reason he changed lenders was to reduce your points and get you the credit which you are now seeing"

Overall, I am still money ahead. However, it was really disappointing to hear my mortgage broker state that there was "no change in fees, just some of them were missing" This was a signed legal document that went to underwriting and he is claiming that some fees were missing and it's no big deal.

I told him that with the new deal I am still $300 money ahead ($750-$450 = $300) and 0.06% lower on the loan, so I will proceed. However, he got lucky by finding a new better deal to cover the $450 in title fees that "was missing" in the original deal. If this new deal didn't happen, I would have asked him to personally pay for the $450 out of his own pocket.

1) Am I over-reacting?

2) How can mortgage brokers cancel a deal and get a new deal 6 days later?

[clarkfan1979]

I looked at the closing documents a second time.

For deal #1, I was scheduled to get a payment of $94,500 at the close of the re-fi. This included a charge of $753 for buying points.

For deal #2, my mortgage broker said, "Congratulations, I got you a better deal and saved you $1,200. No more buying points and I got the rate down from 4.56% to 4.50%. The points was worth $753 and the change in rate of 4.56 to 4.50 is worth another $550.

However, for deal #2, my amount due at closing went down to $93,800. I asked my mortgage broker why I was now getting less money at closing.

Instead of trying to explain the increase in fees, he said that I obviously didn't trust him and that I should look for a mortgage somewhere else.

Anyone else have bad luck with mortgage brokers? I feel like the typical customer doesn't advocate for themselves so mortgage brokers are used to changing terms and getting away with it without having to explain themselves.

Or maybe I am just a big A**hole?

[Another Reader]

He is right.  You should look for a mortgage elsewhere.  He is playing the shell game.  I would fire him and move on.

[Dicey]

What Another Reader said, 100%.

[clarkfan1979]

He is right.  You should look for a mortgage elsewhere.  He is playing the shell game.  I would fire him and move on.

Could you explain "the shell game" in more detail?

To me, it seemed more like "bait and switch"

[Another Reader]

He is deliberately confusing you by improving some terms and making some terms worse, making sure he gets paid what he wants from the deal.  I would not deal with such a person.

[solon]

My spidey senses are tingling. I don't know what he's doing, but I'd bet almost anything he's making more money on the new deal.

[Duke03]

I'd walk away.  He's trying to strong arm you by telling you to look for a mortgage elsewhere.  I bet once you inform him that you are taking his advice he pulls a 180, but screw him go find a new mortgage broker.  In case you didn't know Mortgage brokers on a whole are the scum of the earth.  Their really isn't any qualifications for that job and they will let any joe blow that can sell and push loans do it.  They are one of the main reasons our country had to experience the great recession in 2008.

[Jon Bon]

It is very possible they are being shady.

What is equally possible is there was simply new information. Pretty much EVERY-TIME I get a closing document it is somewhat different from the actual closing. The biggest offenders are taxes and insurance. For some reason despite being a known number they are never right and almost always a guess initially. Doubly so if this involves prepaid rent security deposits etc.

So double check where the delta is on the closing. If its something like taxes NBD, if it is something involving the lender I'd be pretty suspicious.

[Righty]

So at what point do you tell your SIL her accountant may not be the best with numbers? Anything from her books "missing?"

[affordablehousing]

He just found another bank that gave him a better cut. NEVER USE A BROKER! THEY ARE SCUM.

[clarkfan1979]

He is deliberately confusing you by improving some terms and making some terms worse, making sure he gets paid what he wants from the deal.  I would not deal with such a person.

I agree with this conclusion that he is trying to confuse me and switch the deal at the end. That is why I said something to him.

When we spoke on the phone for deal #2, he only talked about how he was saving me $1200. He didn't mention anything about other terms going up. I think that is ok if other terms go up, but you would think he would mention it. I was scheduled to get $600 less money back at closing with deal #2. When I asked him about it, instead of explaining it, he just got angry and told me to find a mortgage from someone else.  I told him that I agreed and I thanked him for his time. Unfortunately, I have had some bad luck with mortgage brokers. I know they need to make money, but they seem more slippery than a used car salesman.
 
I am not going to say anything to my step-sister, but I wouldn't trust this guy with my books. Switching the deal was bad, but not explaining the change in terms and getting angry with me for asking questions was unbelievable. 

[Proud Foot]

Instead of trying to explain the increase in fees, he said that I obviously didn't trust him and that I should look for a mortgage somewhere else.

I'm not familiar with the mortgage broker industry so these changes may be a common occurrence. HOWQEVER, I think it is good you are asking questions and his response tells me all I would need to know about working with him. From your post I didn't feel like you didn't trust him, just that you saw some changes and were trying to understand the difference. Whether he is doing something underhanded or not, the fact he wouldn't answer your question is very shady to me. I personally would not want to work with someone who would not explain and help me understand questions I had about the process.

Find someone else immediately and pass along your experience to your sister before someone else has the same experience and it effects your sister since she gave the referral.

[LDoon]

I personally would not want to work with someone who would not explain and help me understand questions I had about the process.

Find someone else immediately and pass along your experience to your sister before someone else has the same experience and it effects your sister since she gave the referral.

This.  If even the changes were for due cause, don't work with any "professional" that is not willing to spend 5 minutes answering your questions.  Being trying to go through the refi process myself and dumped the initial broker since they never listened to what I wanted (e.g., ask for estimate based on $200k and the estimate comes back for $207k).  Them doing me a "favor" was only to increase their profit.