Legal Question in Real Estate Law in California
Mortgage Broker did not disclose fees
We recently refinanced our home. Before closing, mortgage broker said that he is unable to include any broker fees in the loan since amount was so small. He said we had to send him a $2500.00 check before the loan could close. He said that the check would not be cashed until money left from the loan was in our bank. Needing to close as soon as possible, I sent the check right away. Closed on loan 10/7/2005. Included in the loan were 1400.00 in mortgage broker fees. I immediately called broker and asked for an explanation because he said there would be no fees for the broker in the loan. He said he would have to look at the documents and would call back. Needless to say, he has not. He cashed the 2500.00 check before the loan was funded. Now, loan has not been funded, brokerage firm cashed check and we are now in serious trouble with our bank since that money was not in there. We have now acquired over 200.00 in bank fees alone, with no end in sight. Finally got through to brokerage firm and was told, “ All I can say is sorry.” Are we entitled to our money back, since they did in fact receive a fee in the loan? Not to mention a 350.00 application fee that they never disclosed to us.
4 Answers from Attorneys
Re: Mortgage Broker did not disclose fees
yes, from the facts given, this mortgage broker appears to have fraudulently misrepresented itself to you on numerous levels, especially as a fiduciary with legal duties owed to you throughout the transaction. if you would like further assistance and direction, contact us today.
Re: Mortgage Broker did not disclose fees
These fees are typically disclosed in writing, and many times, acknowledged by the borrower without the borrower even knowing it. (There are sometimes hundreds of papers to sign; and realistically, very few people actually read all of them and/or challenge the fees.)
Nevertheless, if the facts as you present them are accurate, then the broker appears to have made material misrepresentations to you. You likely have a case against the broker for fraud and misrepresentation. Depending upon the facts, your case could include other claims and may even be a candidate for a class action.
You should contact an attorney immediately for help in (1) extracting yourself from the current situation, and (2) pursuing the broker for damages related to the apparent fraud. If you don't want to pay hourly fees to an attorney, you will need to locate an attorney who handles business litigation on a contingency fee basis. We handle these types of cases. Call us if you need more help.
Re: Mortgage Broker did not disclose fees
I am not sure if you are in IL or CA. I am licensed in IL and not CA, and the other two attorneys who answered are not licensed in IL, so you should have both states covered. If you are in IL, you will need an IL licensed attorney to assist you. In addition to what the other attorneys told you regarding fraud and misrepresentation, there are also RESPA violations, and I am certain the Department of Financial Institutions would be most interested in this case. In short, if the facts are as you state, it should be fairly easy to get your mortgage broker to refund your money.
Re: Mortgage Broker did not disclose fees
You are likely entitled to a refund of the $2,500. If this broker fee was not disclosed on your good faith estimate, California regulations provide that that is misprepresentation. With respect to the application fee, you should consult your disclosures. Feel free to contact us with further questions. We may be able to help you obtain a refund.
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