Any mortgage experts out there?

[Ogre Palowakski]

We are re-financing our house and got locked in on a good rate. However, reading through the contract I noticed something that seems like a potential time bomb.

I don't currently have the contract in front of me but says something to the effect of...

"the interest rate may change depending on changes in the borrower's credit rate and/or employment".

I don't like the bank being able to jack up my rate if any problems arise. I don't anticipate problems with my credit or employment but if I could predict the future I wouldn't need to be borrowing money from anyone.

Please let me know what you guys think of that clause. Is it common or does it seem shady to you?

Thanks!

 

[jeep-N-montero]

Call the lender, I hope this is through a credit union.

 

[JL Rockies]

ARMs... it's what started it all...

 

[BonZuki]

Possible explanation!

If this is in the initials disclosures then it is not the final paperwork . The bank that issued this probably sent these in the mail to you and wants them signed and returned.These are to explain to you what your broker or bank has proposed for you .Example if your loan is not locked and these are not the final paperwork things could change in your employment status or credit before you sign the final paperwork. Thus it is an out for the lender in case of worst case situations. Please call me if you want me to help as I have been doing Mortgages for 17 years 435-215-4516 Happy to help Steve Crabtree!

 

[Ogre Palowakski]

If this is in the initials disclosures then it is not the final paperwork . The bank that issued this probably sent these in the mail to you and wants them signed and returned.These are to explain to you what your broker or bank has proposed for you .Example if your loan is not locked and these are not the final paperwork things could change in your employment status or credit before you sign the final paperwork. Thus it is an out for the lender in case of worst case situations. Please call me if you want me to help as I have been doing Mortgages for 17 years 435-215-4516 Happy to help Steve Crabtree!

Wow, Steve. Thanks for your reply. :greg:

What you describe seems to be exactly what is going on. Unfortunately, I can't find the clause again. I went home during lunch to find it and was going to then take it to my lawyer for his opinion. After reading all the docs 4 more times I still couldn't find where I read it :-\.

I know these papers aren't sitting in front of you and I feel stupid asking this but any advice on what sections would contain a claus like that? Yeah, I feel like a dork asking that question

I appreciate your help. After work I'll dig through the docs again and then maybe give you a call if it doesn't make sense.

Thanks again!

John

 

[BonZuki]

No Problem Happy to help!

 

[Ogre Palowakski]

Ok, I was able to sit down with the papers again and re-read everything without the phone ringing, my daughter asking me questions, or any 3 of my dogs strolling by and farting.

Here's the context and language used in the document:

The statement is in a section titled:

"Borrower Acknowledgements, Agreements and Disclosures."

It goes like this:

Modification of Material Facts

Wells Fargo Bank, NA reserves the right to withdraw this offer, or to modify the terms as required if (1) any material facts appear which have not been previously revealed to us by you or were misrepresented by you to us, (2) there is an adverse change in your credit, outstanding liabilities or employment, (3) any material representations made in your loan application are incorrect.

Now, that I re-read this, it seems they are simply saying that if anything was misrepresented by me that they can change the terms of the deal.

Perhaps it's not as scary as I originally thought, however, when it comes to money (especially 30 yr mortgages), I'd hate to underestimate any commitments I'm making. I did that once when I married my 1st wife and that was much more expensive than this mortgage will ever be

So, I'll take this to my lawyer tomorrow but please let me know what you guys think. I see this as potentially being interpreted two ways

1) the bank wants to make sure the facts provided by me in the application are accurate, otherwise, the offer is void and may be modified prior to next round of signatures, etc.

2) worse case scenario - After the contract is signed, etc. they jack up the interest rate if there is a future problem with my credit or employment.


Thanks again for everyone's comments on this

 

[BonZuki]

This is normal so should be no worries!!

1) the bank wants to make sure the facts provided by me in the application are accurate, otherwise, the offer is void and may be modified prior to next round of signatures, etc.

This statement is accurate I talked to my Title company they deal with these documents several times a day and basically when you refinance the deal is not set in concrete until the 3 day right of rescission is up and it's recorded .The bank has the right not fund the monies if they feel that all the facts aren't as they seem don't worry this is standard .Let me know if I can help with anything else or if you have more questions!

 

[Ogre Palowakski]

1) the bank wants to make sure the facts provided by me in the application are accurate, otherwise, the offer is void and may be modified prior to next round of signatures, etc.

This statement is accurate I talked to my Title company they deal with these documents several times a day and basically when you refinance the deal is not set in concrete until the 3 day right of rescission is up and it's recorded .The bank has the right not fund the monies if they feel that all the facts aren't as they seem don't worry this is standard .Let me know if I can help with anything else or if you have more questions!

Thanks, Steve!

I owe you one! (whether that be a drink or some type, food of some type, or parts delivered to you somewhere) :greg:

I appreciate your help and kindness very much!

John

 

[BonZuki]

No worries I hope I was Helpful!

 

[Ogre Palowakski]

 

[BonZuki]

Your Welcome!