I inquired about an interest only loan with Nations Choice Mortgage on 4-11-06. I found them on Bankrate.com. They were listed with very low interest rates and low fees. I guess I should have know right there and then it was too good to be true.
The loan officer Linda Schrader informed me that the loan application fee will only cost me $350. Linda knew I was shopping around for other loans. She told me that no lender should ask for any fees other than the appraisal fee. She claimed the $350 application fee will be used for the appraisal fee so there was really no application fee. Believing it would only cost me $350 I applied for a loan.
On 5-1-06 I signed the good faith estimate and the loan financing agreement. Linda told me I can be approved for a rate of 5.75%. Other lenders told me it was impossible to secure this rate but I trusted Linda. Linda then changed the rate they can offer to 5.87% and then finally to 6.125%. Other lenders again told me it was impossible to secure a loan for 6.125% and quoted me 6.25%.
I received a lock in rate confirmation for 6.125% with a 1% prepay on 5-5-06. After a few days Linda told me that the underwriter will not approve the loan unless we switch to stated income. She said the rate will now be 6.25% with stated income.
I emailed Linda on 5-9-06 requesting for a 100% financing loan with out the 1% prepay. I was never told there would be a prepay penalty. I didn't receive a response so I called her the following day and she told me the rate for 100% financing will be ridiculously high.
At this point I decided to finally apply for a loan with another broker. My real estate agent was very suspicious of NCM because they could not produce a loan approval from a bank. They would only send their approval on their letterhead. On 5-11-06 I received an approval for 100% financing from Chase Manhattan from the local broker.
Linda then informs me that they have problems with gaps in my employment history. On 5-24-06 I called Linda to inform her that I have decided to use another broker to secure my loan.
On 5-25-06 Linda called and told me I have to pay a 1% application fee because of the loan financing agreement I signed. On 5-25-06 Greg Goetz the collections manager called me on my cell phone and tried to coerce me into completing the loan application and promised to have me approved for 100% financing. Greg is not a loan officer but he was promising me he can get a loan approved. When I refused. He then asked me to pay $3300 for the loan application. I asked him to itemize what the $3300 was for. He didn't know.in the same conversation he lowered his application fee demands from $2500 to $2200 and finally to $2000. All sums for which he could not itemize any thing except lawyer and title fees. I informed him that the loan was never secured through them so there can't be any title or lawyer fees. He was very aggressive in trying to get payment and told me it would cost me $2000 just to go to court so I might as well just pay them.
On 5-30-06 I received a letter via Fedex from Nations Choice Mortgage dated 5-25-06. It states that they have only collected $350 of the $5032 non refundable application fee. They claim the Financing Agreement I signed authorized them to automatically deduct the 1% fee. Luckily I put a hold on my account after I found other fraud complaints on this website. I also checked with the Better Business Bureau.
The Better Business Bureau of Arizona reports that the most common complaint against Nations Choice Mortgage is over the rates and cancellation fees. Nations Choice Mortgage has responded to the Bureau stating that recent changes were made to its contract in order to reduce the cause of confusion. Clearly this is not the case and Nations Choice Mortgage continues to try and deceive unsuspecting applicants. Their closing costs estimate on the GFE is for $1495 yet their undisclosed application fee is 1%.
I consulted with the UCLA Law School and they informed me that I was a victim of consumer fraud and maybe even predatory lending. Apparently California is a favorite target for these type of companies because of the expensive real state market here and lax state predatory lending laws.
They also pointed out that it's illegal for companies doing business by phone in the U.S. To promise a loan and ask you to pay for it before they deliver. Requiring advance fees for loans is also illegal even if they call it an application fee. Lastly misrepresenting the terms of the agreements and fees is definitely considered fraud. Mortgage Brokers are required by law to disclose all fees.
I was told to file a complaint with the California Department of Corporations, www.corp.ca. Gov against NCM and hopefully have their CA Broker license revoked.
Filling a complaint with the BBB is pretty much useless. They consider NCM in good standing because they try to settle 100% of the complaints against them. As far the BBB is concerned NCM asking for $2000 instead of the initial $5032 they tried to scam from me is an act of resolving the complaint. What a joke. No wonder NCM is still is business and a member of the Arizona BBB.
Learn from my mistake do not do business with this company. They just want your hard earned money just for filling out an application with them. They claim they have earned it. Check out this very pathetic attempt via email to get me to pay them:
Annaliza,
Regarding your situation, YOU requested your loan to be locked. You expected me to deliver EXACTLY what you applied for. I have and per the SIGNED LOAN FINANCING AGREEMENT I have a right, by the State of
California, to cover the cost I have incurred in processing your loan.
I don't expect you show up at the hospital or a patients home, work for 8 hours, then say "MY TIME AND MY EFFORT IS FREE, YOU OWE MY NOTHING."
That is what you have done to us, that is the exact reason that if I can do everything I said I can do in my contact, I do have a right to cover my costs in your loan process.
As for BBB, if I can do EXACTLY what I can do what we signed the contract at, why should I get a black eye. If your saying that I did not provide you what I said I would, I will not ask for reimbursement of costs.
Linda, attempted multiple times to contact you and you did not return the favor until yesterday. We have done EVERYTHING WE SAID WE WOULD DO.
You can talk to Greg about resolution.
From reading other complaints on this website I'm very lucky I never secured my loan through NCM. I probably would have fallen out of escrow.
Guess how much I ended up paying the local broker for securing my loan? 0, nada. I found out that a legit broker receives all his fees from the lender. The appraisal fee was paid for from escrow. I didn't pay a single dollar to the broker.
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