We were contacted in July by Bedford Home Loans (administered by Ameriquest Mortgage and since bought out completely by them) after filling out a "Lending Tree" profile to refinance our home which we built in l999. The guy was really high pressure on the phone promising he could get the loan approved and closed within 2 to 3 weeks once application was made.
We were presented with the option of an "Interest Only" loan based on the Libor which posted an interest rate of 3.85% at the time of our refinance. It is a variable interest rate which readjusts over a 6 month period and the term of the loan was to be 30 years. We questioned the loan officer in many telephone conversations and were told specifically and repeatedly that while we could pay interest only (which we never intended to do) if we continued to make the payments at the same rate that they were currently being made (including the principal we were currently paying on a 30 year fixed at 6.25% thru a local bank) we would reduce the life of the loan by approx. 15 years and that although it was variable and would readjust every six months, it would never adjust in any period more than. 25% and would probably never go up more than 1 point. I have done that paying approximately $2500 on the principal monthly over and above the required interest only payment.
We closed in late August (a really negative experience from the get go with a notary being sent to our home to complete the transaction, then Ameriquest LOSING the documents and requiring us to close AGAIN with a different individual 2 weeks later! We wondered right then if we had been scammed!) They sent our taxes to the wrong address even tho they were provided with the correct address which resulted in interest being added which we were successful in forcing them to pay!
Our mortgage has changed hands several times since August and we received a notice in the mail a couple of weeks ago that the interest rate had gone up to 5.25%! Obviously, they told us what they needed to tell us to get us to sign with them and do it quickly. They ALSO promised me repeatedly that we would receive copies of both appraisals that were done on our home, neither of which we have ever received, AND I found out last week that one of the appraisers was never paid by them despite statements being sent for 6 months.
We are refinancing yet again with our local bank and haven't been hurt long term by this unless you count the loss of the low interest rates that were available when we were conned by this company (which is bad enough on a jumbo mortgage) but the business practice that allows clients to be blatantly lied to by loan officers (our guy was out of Minnesota with Bedford Home Loans... Wouldn't return any phone calls once the loan closed... Imagine that?!) simply to get them signed is clearly lacking in integrity and hopefully illegal as well.
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