Legal Question in Real Estate Law in Massachusetts

I have used the service of a mortgage broker suggested by my real estate agent who's also a family friend. So I didn't really pay attention to any of the document that I signed as part of the house hunting and purchasing process last year. It was not until that I paid off the mortgage last week did I get an email from my broker saying that I have signed a 180 Day Acknowledgment e-document. The document said that My broker earns a financial compensation from the lender of my mortgage transaction. It says that that the lender imposes a stiff financial penalty to the broker if the loan is paid off in less than 180 days from the closing and by signing the document I agree that I do not intend to pay off this loan within 180 days. The broker wants me to pay the whole penalty. Do I have the ground to argue for less.


Asked on 1/13/16, 4:42 pm

1 Answer from Attorneys

Unless you intended to refinance within 180 days and did not tell him, you are not responsible for the penalty. Moreover, the mortgage broker should have pointed out the penalty clause.

Unless the sheet says you represent and warrant you will not pay-off the mortgage within 180 days of closing the Broker is not entitled to have you pay the penalty. By the way, I am sure your Mortgage has no pre-payment penalty so the broker is just making sour grapes.

I generally do not like to use mortgage brokers who are linked to real estate agents just for this kind of reason. They all seem to try to make the borrower responsible for their interests instead of being interested in the borrower's best interest. Independent Mortgage Brokers with good reputations tend to do better jobs and find better deals without this kind of issue.

Read more
Answered on 1/13/16, 5:08 pm


Related Questions & Answers

More Real Estate and Real Property questions and answers in Massachusetts