Has your mortgage broker ever provided you with a loan at one rate only to persuade you to refinance 6 to 12 months later? If so you may be among the many people in this country that have fallen victim to what some government officials are calling the refinance bate and switch.  It works like this: The broker will gets his client into a loan that the broker knows does not have the best interest rate that his client could qualify for. Then, six month’s later, that same broker will call his client informing the client that he can get them into an even better loan with an even lower interest rate than the one they just signed. Why would any broker do this? The answer is that all mortgage brokers get paid a commission each time they sell a loan. If a broker can sell two loans to the same borrower in a given year, that broker will earn two commissions, often at his client’s expense. Additionally, when the broker gets a client into a loan that has a higher interest rate than that which his client could qualify for, the broker will often get paid a commission from the lender (this is referred to as a yield spread premium).  So, have you ever been the victim of refinance bate and switch? Want to add to this Blog? Here’s how.

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Has a lender failed to disclose prepayment penalties or terms that would limit your ability to refinance? Many people are unaware of the hidden penalties written into their loan. At MAA, when we review your loan, we will uncover every possible penalty and clearly explain it to you, in big BOLD print, so you are aware of it BEFORE signing that loan.

Do you have a similar experience, where penalties kept you from refinancing, or paying off the loan in order to retain a more affordable one. Are you at risk of losing your home because these terms were not clearly communicated to you by your lender? We’d like to hear about it.