My husband and I were looking to refinance our home loan. Credit scores are in mid 500's so I know we won't get a good rate. Ameriquest offered us a rate of 7.25 which I thought was alright under the circumstances. I knew there was a three-year pre-payment penalty.
The agent wanted to do the appraisal right away, this was Friday and our appraisal happened on Monday. We signed the papers the same day with a notary we met in a restaurant (not preferred), based on an anticipated appraisal of $156,000.
Our 7-day waiting period ended on Sunday, 5/30/04. Called agent on Tuesday, 6/1 and he said everything was looking OK, they didn't have the appraisal back yet but had a "verbal" of $156,000 so it should be fine. Even asked me to fax him our bank information so they could wire us the cash out amount ($12,000) on Thursday 6/3/04.
Later on Tuesday, he calls me and says that the "appraisal came in less than anticipated ($150,000) so he gave me the choice of getting less cash out or increasing the interest rate slightly in order to get the same amount of cash out because the loan to value ratio would go up from 75% to 78%, which made a $28 difference in our payment. I just wanted it overwith so I said fine, do the higher payment.
Later on Wednesday 6/2 he tells me that there is a problem with the appraisal, apparently the appraiser was not on the "Mercury" system they use and therefore it is possibly invalid for the purpose of the loan, he will have to check with his branch manager to see if they can "override" to make the appraisal go through anyway.
Today Thursday 6/3 he tells me that the appraisal cannot be used and that another appraiser will have to come to our house and we will start the whole process all over again!
It seems strange to me that the whole loan was written up and signed before the appraisal ever came in. Being new to this, I didn't know what to expect.
I want to back out completely now, but I am wondering what the risks are and will they try to "get back at me" now that they have all this information about me and the previous loan papers signed? They can't count that as a legal contract now, right?
My bills are all screwed up now. I had paid some other stuff off in anticipation of the expected wire to our account and now it's all messed up.
Also, they were supposed to take over taxes and insurance in an escrow account but never asked me for the insurance papers, isn't that wrong? How else would they know who to pay for insurance?
P.S. The fees for this $117,000 loan were $6,258 - $622 for "prepaid items, " $2126 for closing costs and $3,510 in "discount points" to buy the interest rate down...??
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