Bait and switch
After spending $350 on an appraisal, plus all the time it takes to deal with all the paperwork, Greenlight gambled that I was far enough into the loan that they could jack their rate up from 3.375% to 3.5% and that wouldn't be a big enough difference for me to walk away. Here is the bare-bones summary of what happened:
Bait:
ME: April to All Lenders: "I would like an 80% loan to value cash-out refi on a home with estimated value of $225k and existing loans of $140k."
Greenlight: We can do that for 3.375% with no cost to you other than a $350 appraisal fee.
Me: Let's do it
Greenlight Loan Documents: home value $289k, loan $194k
Me (email): your loan docs don't seem right, this is a 67% Loan to Value (LTV). If the appraisal is lower, do we have to redo the documents? If it really appraises that high, I would want a higher loan amount.
Greenlight (email): That's ok, just sign these. We can amend the documents when we get the appraisal.
Appraisal: $218k
New Loan: $170k @80% loan to value, just what I asked for originally.
Switch
Greenlight: Golly, the appraisal was low. We need to increase your rate to 3.5% because the LTV is 80%
ME April 30 (direct quote from email): "I told you I was interested in an 80% LTV and taking out the rest in cash when you quoted the $350 closing fee. I am interested in taking out the $30 k and having you honor your no closing fee commitment."
Greenlight (email): May 1. Let me check with my manager.
Greenlight: May 8 (direct quote from email) "Good News! The loan was formally approved..."
Greenlight: June 1. All we need now is your approval of the 3.5% rate.
ME: wait a minute. What did "Good News! The loan was formally approved.." mean? Also, this is almost identical to the loan I originally shopped to all the lenders. I chose you because you said you could do it for 3.375% and no closing costs.
Greenlight: the appraisal came in under what we estimated
Me: the appraisal is irrelevant. I asked for 80% loan to value. Simply multiply the appraisal by 80%, and that's the loan you told me you could do for 3.375%
Greenlight. The 3.5% loan will only cost you $10 more per month.
Me: it is now June and we should be closing this loan. I asked every lender in April to give me their rate on a $225k home cash out 80% loan to value so I could compare Apples to Apples. You had the best rate. Changing the rate 2 months later sure smells like a bait and switch. Also, in May you said "Good News! The loan was formally approved.." At what point do we have a deal that I can count on not changing with your next email?
Greenlight: I'll see what I can do.
Me: it has been another week
Greenlight: your rate lock has expired. Now you can pay the 3.5% plus another $190 in fees. Its a great deal.
POST SCRIPT: I sent them a draft of the above and offered to print their rebuttal, but they did not reply. I have seen other complaints online about this company, and they posted a response to almost all of them, aggressively defending their reputation. I expect them to counter with one or more of the following:
-They tend to say their investigation reveals that the person posting is not a legitimate customer but is a plant by a competitor. Well, I am a legitimate customer and am willing to give contact information if I have to prove it.
-They are also likely to say something about how I signed the paperwork for the 67% LTV loan and it is only obvious that the rate would change if the LTV went to 80%. My reply to that is that I signed under false pretenses based on my email questioning the paperwork and their reply. I told them verbally at the beginning I was looking for 80% LTV, and I sent them an email before signing telling them I wanted a higher LTV than what was in the preliminary loan docs. They had an opportunity and an obligation at that time to tell me that raising the LTV from 67% would result in a higher interest rate since the rate, points, and fees are the heart and soul of the loan. As a result, I had every reason to believe that the rate quoted was good from 67% up to 80% LTV.
-They may apologize for the misunderstanding. A competent loan company that has been in business this long knows, or should know, exactly what they are doing. The emails clearly show I wanted a higher LTV, and that they implied that it was no big deal to adjust the loan values on the documents once the appraisal came in. Either they deliberately failed to tell me the that the higher LTV I wanted would cost more, which would be fraud, or they truly didn't think it was important, in which case they are incompetent. Either way, I feel obligated to warn others about this company.
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