Borrowers: Are you thinking you have been a victom of Bait and Switch
This code is in many state laws now, and should be a matter of good business if it isn’t a law.
A mortgage broker or loan originator on behalf of a mortgage broker shall not charge any fee that inures to the benefit of the mortgage broker if it exceeds the fee disclosed on the written disclosure pursuant to this section, unless (a) the need to charge the fee was not reasonably foreseeable at the time the written disclosure was provided and (b) the mortgage broker or loan originator on behalf of a mortgage broker has provided to the borrower, no less than three business days prior to the signing of the loan closing documents, a clear written explanation of the fee and the reason for charging a fee exceeding that which was previously disclosed.
The typical mortgage scam this refers to is quoting a standard program, then at the last minute coming up with a reason you have to go with a higher rate, exotic program.
Larry, Another form of bait and switch is promising the buyer a “funny money” loan (”funny” term for specialty programs like 1st time homebuyer, CASA, etc.) and then a week or two before the closing, when everything should be done, the buyer is informed that the company cannot do that program! The company should clearly have known at application that they were not authorized for the special funding program discussed. Waiting that long may be the lender’s attempt to keep the loan because the closing will not happen if the loan is transferred.
yes, for sure. i have seen that done and wouldnt tolerate it.