Legal Question in Real Estate Law in California
Does the loan agent have the obligation to inform me the loan is not guaranteed?
Last month, when the rate was very low, we tried to refinance our house. A friend introduced a loan agent to me and this loan agent promised to lock an interest rate of 4.875% for us. Now one month later, the loan agent told me that the loan can't be approved because too many people applied and the bank could take all applications. Our locked rate has expired.
We are very upset. We never expect that could happen. The loan agent did not inform us this possibility, not even a hint. We had other options at that time. If we had known this situation beforehand, we would definitely avoid it. In this refinance, we intended to increase the loan amount from $250K to $350K so we had some cash to buy a bigger house. Now we are ready to make an offer, but nowhere to find the down payment.
My question: I want to file a complaint against this loan this agent, but do I have a case? Does the loan agent have the obligation to inform me the loan is not guaranteed? What else can we do?
1 Answer from Attorneys
Re: Does the loan agent have the obligation to inform me the loan is not guaranteed?
Was the promise in writing? If so, re-examine the written promise and see if there were conditions or "subject to" restrictions on the supposed rate lock. If the lock was given orally, it might still be enforceable in theory, but as a practical matter it would be hard to prove all the terms of an oral contract by credible evidence, and/or to show reasonable reliance to support a fraud claim.
I'd start by finding out who licensed this broker and looking at that agency's public complaint process (as a prelude or alternative to possible suit). Perhaps he wasn't even licensed. That would give you a stronger case but probably a weaker chance of collecting a judgment.
The Department of Real Estate has a victims of fraud compensation program, but I think you need a judgment before you can apply to tap it.
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