This Mortgage Broker Spells T-r-o-u-b-l-e

Q: I went through a mortgage broker when I purchased my house. I just closed on July 30. A week after I closed, I received a letter stating that the company that they sold my loan to went out of business. My mortgage broker asked me to send my first payment to them while they looked for a new company to service my loan.

Yesterday (August 24), I received a call from my mortgage broker. They said that they just needed me to sign one more document, which they sent as an attachment to my e-mail address. The body of the e-mail didn’t explain the document, just asked me to sign it and return it to them asap. The document is called a “Mortgage Broker Fee Agreement”. The document lists all of the fees that I paid directly to the broker at the closing. However, it also lists a new 2% YSP that has not been on any of my paperwork until now.

When I chose to work with this broker, I asked questions about the YSP right away and was assured that there would not be one on my loan. I checked my paperwork again last night and could not find any mention of this 2% YSP.

My mortgage broker already dated the document that they are asking me to sign for July 27, 2009. My feeling is that they are trying to get this extra 2% commission from whatever new company they sell my loan to. While this is unethical, it doesn’t effect me directly. However, I’m wondering if it can somehow effect me directly if I sign it. Is there any way that this can change what I owe and require me to pay more?

I’m really confused. What is your take on this? Thanks for your help!

A: You shouldn’t send payments to anyone other than the lender or the new servicer. What your mortgage broker has asked you to do – send the payment to him – is as close to a felony as you can get.

The same thing applies to the mortgage broker fee agreement, which you should have received when you first applied for the loan. The 2% YSP is an underhanded attempt by the broker to make an additional commission on your loan.

This mortgage broker spells t-r-o-u-b-l-e, and I’d stay away from him.

Manufactured Housing Woes

Q: My closing date was set for 8/26. On the morning of 8/21 I get a call from my Mtg broker stating that the mortgage company has “decided that they are no longer going to finance manufactured housing” & that she’s “found someone else to finance me but doesn’t know when we’ll be able to close”. The lender that she “found” was the one that was originally was supposed to do my mortgage but the broker said that she was leaving them and would make sure that my paperwork went through with the new company (the one that now won’t finance mfg homes anymore). This all seems very suspicious to me.

I intend to contact the original Mtg company that is playing with my life (according to the broker)but want to have as much info as is possible prior to doing so. Is this legal? Is the broker the one that’s feeding me the line? Any info or advice that you can provide me would be appreciated.

A: Making loans on manufactured housing is a very touchy issue. Most lenders stay away from manufactured housing, and the ones who do make those loans are liable to pull out of it at a moment’s notice. What happens is this: the mortgage company does not use its own funds to fund your loan; instead, they have to obtain a commitment from an investor – usually another bank – to step in and fund the loan. That investor decided apparently not to go through with their commitment.

And that is why I tend to believe your broker – looks like she got caught in something that was not of her own doing. At this point in time keep your fingers crossed and hope that the other lender will come through.