In early October I found a home I wanted to purchase in New Fairfield, CT. The realtor I found the home through recommended a mortgage broker by the name of Joseph Cilento (AKA: Joe Cilento). I was doing 100% financing on this new home because I had not sold my existing home yet. I was doing this 100% financing by completing an 80 - 20 loan. This is where you get 2 loans, one regular 1st mortgage for 80% of the homes value and another 2nd mortgage for 20% of the homes value. I was planning on paying off the 20% portion as soon as I sold my old house. The problem I had was with the the 1st mortgage 80% home loan portion.
I spoke to Joe Cilento by phone and he informed me that I could get a rate of about 6.25% on my 30 year fixed home loan with no points. I told him I wanted to get the rate under 6% and asked how I could do this. He suggested I pay 1.25 points to lower the rate to 5.875%. The 1.25 points would cost me about $3,420, but I thought it was worth it to lower the rate. I asked for this information in writing and he sent me the following email:
Todays rates for your loans are as follows:
purchase price: 342,000
1st mortgage: 273,600 80%, monthly pymt = $ 1,618
2nd mtge: 68400 20%, monthly pymt = $ 399
taxes and ins est) = $ 450
total 342,000 100% $ 2,467
1st mortgage: 5.875 %, 30 year fixed, no prepayment penalty. Points are 1.25% based on a 20 % second mortgage. Monthly
2nd mortgage fixed 7.5& with 1 point or variable at 7.0% with 1 point.
If you put 5% down payment, the points on the first mortgage are reduced to. 25%
Let me know if you wish to proceed.
Joe Cilento
203-994-6087
I was also speaking to another mortgage broker who offered me the same deal, but I decided to go with Joe Cilento and his company American Financial Resources (AFR Mortgage) because I had spoke to him 1st and I thought it was fair to give him the loan. I forwarded my information to them and began the loan process. I was told my rate would be fixed at 5.875% as per our original agreement. I filled out all the necessary forms and was in constant contact with the lender about the loan. The entire time, I was told that verbally my rate was fixed at 5.875%. I received my closing estimate documents which again stated the rate of 5.875%. I had every reason to believe everything was fine and just as had been discussed previously.
The whole thing changed when I got to my closing on December 1st. I saw the rate had changed to 6.25%, which I was originally told was the rate I could get without paying any points, except the were still charging me the 1.25 points ($3,420). I was of course very upset about this and called Joe Cilento at the closing. He informed me that I had never locked the rate. I told him that he had repeatedly told me the rate was locked at 5.875%. Basically he back tracked and lied and said he never said that. They raised the rate. 3875% and still took the points. Unfortunately, I had no choice but to close on that day or I would have lost the house, plus I had already paid the movers and arranged for someone else to rent my old house. I had to close that day. My lawyer informed me I should take it up with the Connecticut Department of Banking.
I did write a letter to the Connecticut Department of Banking and they began to research it. Richard Dubnoff the CEO of American Financial Resources repeatedly lied to them. 1st he stated to them that I never locked and was therefore locked at the market rate on my closing. I went back to the Department of Banking and explained about the points and sent them my email correspondence with Joe Cilento. I then asked why would I pay them almost $3,500, if I was going to get the regular market rate anyway. The went back to AFR Mortgage about this and Rich Dubnoff responded in a letter that the $3,420 was their profit on the loan, even though the closing documents clearly state this was a "Loan Discount fee", separate from their "Mortgage Broker fee" (about $600 more). Why would I possibly pay $3,420 plus the $600 to a mortgage broker just to get a loan when any normal broker charges probably around $500 - $700 total. Unfortunately, the Connecticut Department of Banking said there was nothing they could do because it is my word against theirs and I didn't have a written lock rate document.
I agree that I was misinformed by not requesting the written lock rate letter, but I honestly didn't even know I needed it. This is only the 2nd home I ever purchased and the first loan I did through my bank, so there was none of this deception or fraud. Of course in the future I will always get this letter, but that is still not a good reason for them to bait and switch, lie to me and the state department of banking and rip me off for $3,420.
SUMMARY: Joe Cilento and American Financial Resources, offered me a rate of 5.875% with 1.25 points. I was told this rate was locked. They then raised the rate on the closing date without ever mentioning anything to me and still took the points, then when I complained to the regulators, the CEO of the company Richard Dubnoff proceeded to consistently lie and deceive them just to continue ripping me off and scamming me on this home loan.
Thank you for reading my story and I highly suggest you DO NOT EVER USE Joe Cilento or American Financial Resources as your mortgage broker or mortgage company under any circumstances. They will, in my opinion, do everything they can to rip you off and scam you if given the chance. If you do use them or any mortgage broker for that matter make sure you learn something from this story and get everything in writing including the written lock rate letter.
Dan
New Fairfield, Connecticut
U.S.A.
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