In March my wife and I were considering selling our house and purchasing a new construction and needed 10% down to solidify this purchase. I asked our neighbor Ray Serrano owner of Serrano Financial who is a broker and friend to suggest a loan product we could get to secure the 10% down and the meantime stay in our existing home til the new home was completed. He suggested the 30 year option arm to get the cash we needed and refinance the current morgage.
My wife and I trusted Ray and went with the 30 yr option arm not knowing about the 3yr. Prepayment penalty for trying to get out of the loan if we need to sell our home. This prepayment penalty will cost us over 6k and what really upset me is he knew we were going to be selling our house in the next year why would he suggest a loan with a prepayment penalty built in.
Also my wife and I are considered A paper because our credit scores are both well over 700 and I understand now this type of loan is more often used for those more credit risky. I also learned that Ray received a POC of $5,742 from the lender plus our origination fee he charged us of $4,000 so he made approx. 10k off our loan no some friend and no wonder he did not disclose to us the prepayment penalty his greed was stronger than his frienship.
In finishing we never did build the new home and now I have had a job transfer to another state so now we have no choice but to sell our house and there is still 2 years left on our prepayment penalty what can we do?
By the way I did confront Ray about this bad loan product he sold us and he offered to pay the prepayment penalty. But a few weeks later he sent a letter to us saying he felt he had done nothing wrong and was rescending his offer to pay our prepayment penalty.
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