A question about the process of applying for a mortgage?

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I made a mortgage loan application through a mortgage broker. About a week later the broker called and told me the loan was approved. About a week later the broker called and said the mortgage company needed additional information, and I was to resubmit the application – which I did. This cycle then occurred again. I submitted the third application. It was approved, however the interest rate was higher than what was approved for the previous submission. I questioned this to the broker, and was told that this was acceptable practice. We closed based on the third application. Is this practice legal?
The mortgaged property is in Leon County FL. The Mortgage lender was in FL. The broker was a family acquaintance. All three applications went to the same lender. I did propose another lender to the broker early on in the process, however he said that we were too far into the process to change. All the communications I received were by telephone. The documents I have are the copies of the three applications that I signed and a fax I sent to the broker questioning multiple applications when the first one was said to be approved, and the resultant increase in the interest rate. In hind-site I suspected steering and collusion. That broker is no longer in business.

4 Comments
  1. Reply
    Go with the flow
    February 4, 2014 at 5:07 am

    You never compared. And the broker knew this.
    In other words – you were easy.
    You had no idea what other banks were offering.
    You went by the brokers words.

    Next time compare banks. Trust no one with your money.
    Trusting people become poor very quickly.
    Oh, it was legal. But you will never know if you got a good deal

  2. Reply
    Yirmiyahu
    February 4, 2014 at 6:06 am

    practice is legal, but the mortgage broker lied to you. He submitted the application to three different lenders. Only the 3rd lender approved.

  3. Reply
    loanmasterone
    February 4, 2014 at 7:03 am

    The procedure was pretty much in line and legal with what a mortgage broker would have done to get you approved for a mortgage loan. Your mortgage broker apparently had to send your application to 3 different lenders or investors in order to get you approved.

    This is what mortgage bankers and brokers do to obtain mortgage loans for their clients.

    Each direct lender or investor your mortgage broker sent your mortgage application to would have different approval criteria, interest rates as well as charge different points and fees in order to close your mortgage loan.

    Why you had to sign 3 different applications is not normal as, most mortgage brokers would send the same application, you submitted to them to 3 different lenders or investors. At closing you would be required to sign a new typed application indicating the final application information.

    Apparently when you were approved for the first mortgage loan, there was a requirement or stipulation of the direct lender or investor that could not be met, therefore your mortgage broker would have canceled this approval based on the fact that the condition or stipulation could not be met.

    I hope this has been of some benefit to you, good luck.

    “FIGHT ON”

  4. Reply
    chatsplas
    February 4, 2014 at 7:23 am

    Before closing you should have asked these and more questions
    It’s your Largest purchase and small differences can make significant changes on what you pay
    YOU needed to understand what was going on, to ask questions, to follow up
    Sounds like there may have been issues with you: credit, debt load, etc

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