Legal Question in Legal Ethics in Utah

Is the Broker in the right?

My husband and I refinaced our home through a loan officer. Two days before closing our loan officer left a message saying we needed to come up with 260.00 to close on our loan. Upset a little but nothing said. Went to closing and while going over documents we were told by the closer that we were getting back 260.00 and did not need to pay anything. The day of funding we recieve a call from the broker saying that because they lowered their fees for us,(which we had no idea until we heard atclosing)the money we were recieving back was theres because they deserved it. Long story short they keep calling asking for it and we said no you are not going to recieve the money. He is now taking us to small claims court next week and suing us for the fees he claims he reduced(1770.00). Can he really do this? After closing is it not all taken care of? He can decide he wants more money after closing?


Asked on 10/25/01, 7:03 pm

1 Answer from Attorneys
Alvin Lundgren Alvin R. Lundgren, L.C.

Re: Is the Broker in the right?

Based on your story the broker is not entitled to any fees. Brokers make their money by the upfront fees they charge, and when the place a loan. A broker will find a buyer for a loan and get a commitment at a certain rate. They then increase that rate to the consumer. Their fee is the difference in the rate between what the commitment was and the amount you wind up paying. Unless the broker has some written agreement spelling out that you owe the fees, it is unlikely that he/she will prevail in court. CAVEAT: This is based on your recitation of the facts. The broker probably has a different version. You may want to offer a compromise, just to avoid the hassle of a couple of hours in court.

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Answered on 11/23/01, 9:44 am


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