I've been through a number of refinances in my life, and I guess I just got a bit complacent about trusting mortgage companies. Up until now, every refinance was done professionally, honestly, and very efficiently. Then I ran into Coactive/Vulcan.
My wife and I where doing a cash-out refinance to pay for a home remodel. The loan officer from Coactive told us the loan would have a 1% INTEREST rate for the first 4 years, after which it was a conventional ARM. He said the loan was no points or fees, and that we didn't have to worry about prepayment penalties because why would we refinance a 1% interest loan?
Everything sounded good. We signed the papers and then, like a naive trusting fool, I skimmed over the documents, mostly checking to make sure the title and so on was correct.
Turns out that our loan officer was either a complete incompetent or a crook, or both. His "no points or fees" meant a $25,000 loan origination fee. The document that listed this was NOT included in the documents that we got to review. The 1% interest rate was a 1% payment rate. Actual interest rate was about 8.5%. And this thing called negative amortization? And our prepayment penalty worked out to be $18,000.
Through a number of phone calls, letters, and faxes we where able to get them to refund $15,000 of the origination fee, but we still got screwed out of $28,000. We where very lucky - we had the financial means to get out of this loan and not lose our house.
I also want to point out that my wife and I have a credit rating of over 800, and a gross income well into the 6-figure range, yet these so-called "professionals" stuck us with a sub-prime loan.
Also, in trying to resolve things, these two companies are some of the most rude and obnoxious people I have ever dealt with. The manager at Coactive had an incredibly condescending demeanor, and the CEO of Vulcan Financial (who underwrote the loan) launched into a full-on character assassination of me because I had the audacity to complain about him to the bank that he sold the loan to (AFTER he was well aware that the loan was secured through fraudelent means).
Anyway, my wife and I are resigned to the fact that we've lost almost $30,000. Legally, I don't think we have any recourse. We made the near-fatal mistake of trusting a loan officer. My advice to everyone out there: Don't trust ANY loan officer's verbal promises! And stay away from Vulcan and Coactive!
And to all the competent and honest loan officers out there (the majority of you), I'm sorry you have to deal with the backlash and mistrust created by those parasites who call themselves financial professionals. For the most part, you do a great job.
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