"Right to cancel" mortgage refinance

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Hi there,

Wife and I are currently going through the last steps of a mortgage refinance... which was actually not a pleasant experience towards the end, and perhaps most importantly I think we are completely overpaying our mortgage broker (which actually changed throughout the process, as the original broker had some family issues). Just signed all the docs with the title company Friday, and the contact there mentioned the right to cancel. We are considering opting to use the right to cancel.

I'm wondering if anyone has any experience cancelling, and what implications that has?

I'm thinking I will have to pay for the appraisal report and credit scores done... anything else? I have not yet contact my mortgage broker about this. I am trying to get a bit more informed first. I believe he's going to try to confuse/threaten that he will impose fees and I'm trying to understand beforehand if that is common.

Thanks!

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I'm not sure if you're still around, but I really need to ask you a question. Can you fax the cancellation request in s... (more)

skibum1980 (Sep. 02, 2010 @ 11:02a) |

I'm not sure who you're asking this of, but the answer is that to be effective, you have to rescind exactly in accordanc... (more)

minerva66 (Sep. 02, 2010 @ 11:54a) |

You know you can also do a streamline refi with Amerisave or any bank for that matter as long as they do VA loans.

dirtrat (Sep. 04, 2010 @ 2:29p) |

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Supposedly the whole transaction is to be undone. That means the refinance lender gets back every penny

If you are coming to the table with no cash (financing all the closing costs) those third parties wont get paid...they would need to come after you separately.

Whether you are liable to them, and whether they would actually bother pursuing you, is a different story. Depends on what you signed.

Its always better to walk BEFORE signing the docs. You may be liable to the title company for their fees, the appraiser, the broker may try to keep application fees, the lender may try to go after you for underwrriting fees etc.

Also, I dont see what the point is in contacting the broker...just follow the cancelation instructions if thats what you want to do.

You already KNOW what the brokers response is going to be - either threatening you, or promising to do your next refi at a discount. He isnt going to refund a penny of his commission to you, if thats what you are hoping for.

Thanks for the comments!

We did pay a check to the title company for the closing costs, so it was not "no cash". The title company contact was very straight forward and made it clear (verbally) that if we cancel, they charge nothing. I thought the lender is in the same boat, per federal law (?), according to the cancellation notification -- "we return to you any money associated with the transaction".

I'm fine with paying the appraiser fees, I understand that part.

As for the mortgage broker, that's what I was wondering about. I don't know what they generally charge for cancellations at this stage.

BTW, what is generally accepted as a decent commission for a mortgage broker these days?

My limited experience I've been told it's a fraction-to-one-percent of the loan amount, say 0.5 - 1%. In my case this guy is charging me 0.8% (on a 417k loan).

SUCKISSTAPLES said: That means the refinance lender gets back every penny



I think you got it backwards SIS. My understanding is that the lender gives the borrower back every penny the borrower has paid to anyone in connection with the refinance... i.e. appraisal, title, credit, etc. So, if you choose to exercise this right, you shouldn't be out any money

From Reg Z

(d) Effects of rescission. (1) When a consumer rescinds a transaction, the security interest giving rise to the right of rescission becomes void and the consumer shall not be liable for any amount, including any finance charge.

(2) Within 20 calendar days after receipt of a notice of rescission, the creditor shall return any money or property that has been given to anyone in connection with the transaction and shall take any action necessary to reflect the termination of the security interest.

Some previous posts in the stickied mortgage thread about the right of rescission:

glxpass said: SlimTim said: The rescission period is also 3 business days, so if there are holidays and weekends involved you may need 5 or 6 calendar days before the lock expiration. My last refi almost got hosed because of this, the broker LO didn't realize there was a 3 day weekend right before the expiration.
Saturday counts as a day in the rescission period. Sundays and holidays don't count. See here, for example.


glxpass said: livedog said: I'm a little curious how the rescission period works. This article "How Can the Right of Rescission Protect Me?" says

Q: Will the appraisal fee and all title and escrow fees paid also be refunded to me if I rescind my refinance mortgage?
A: The Federal Truth in Lending Act guarantees your right to a refund of ALL fees you have paid in advance of obtaining the refinance mortgage if you rescind the loan. These fees include the appraisal fee, title search fee, escrow fees, any inspection fees.

Does that mean that you would get the prepaid appraisal fees refunded? What about application fees? Must those be refunded as well?
That seems like an almost incredible amount of protection for the borrower...

It appears that indeed appraisal fees and all other fees associated with the loan must be refunded to the consumer. See FDIC Law, Regulations, Related Acts - 6500 Consumer Protection - Section 226.23 - Right of Rescission. An excerpt:

Paragraph 23(d)(2).

1. Refunds to consumer. The consumer cannot be required to pay any amount in the form of money or property either to the creditor or to a third party as part of the credit transaction. Any amounts of this nature already paid by the consumer must be refunded. "Any amount" includes finance charges already accrued, as well as other charges, such as broker fees, application and commitment fees, or fees for a title search or appraisal, whether paid to the creditor, paid directly to a third party, or passed on from the creditor to the third party. It is irrelevant that these amounts may not represent profit to the creditor.

2. Amounts not refundable to consumer. Creditors need not return any money given by the consumer to a third party outside of the credit transaction, such as costs incurred for a building permit or for a zoning variance. Similarly, the term "any amount" does not apply to any money or property given by the creditor to the consumer; those amounts must be tendered by the consumer to the creditor under 226.23(d)(3).


glxpass said: livedog said: So, does that mean you can't get the application fee refunded without actually closing and then initiating rescission? That seems really overkill... perhaps just the threat of rescission is enough to get the application fee refunded? This is all news to me. I certainly didn't think that the application fee got refunded if a borrower backed out of the refinance.
It's important to distinguish between "signing" and "closing." I believe closing means that the loan has been recorded, whereas signing obviously is when you sign the loan documents and are given copies of those documents, including disclosures. From bankrate.com - Right of rescission lets you back out of some loans (ignore the use of the term "close" and substitute "sign" for it):

bankrate.com article said: When the clock ticks ...
That clock ticks only on business days. Much has been written by federal regulators about what counts as a business day. In general, every day is a business day except Sundays and federal holidays. Saturday counts as a business day, even if the lender's office is closed on Saturdays. The right of rescission expires at midnight concluding the third full business day after the papers are signed and all other conditions are met. So, for example, if you close a home equity loan on Thursday, the clock starts ticking Friday, continues to tick on Saturday, stops on Sunday and resumes on Monday. The right of rescission ends Monday at midnight.

Because of the short time frame, rescissions are fairly rare, and IMO not a wise way to back out of a loan. Different lenders have different policies regarding refunding application fees if you decide to drop the loan before signing the documents. Personally, I think if you paid an upfront application fee that you knew was non-refundable, then that's just the risk you take if you decide to not go through with the loan because you subsequently found a better loan product elsewhere. Same with any upfront appraisal fees that you paid.

Just get all the information you need ahead of time about these fees so that you can make an informed decision. This Mortgage Professor article provides a good perspective on the rescission process and how it's used.


SlimTim said: Not a whole lot of meat to my anecdote, but I've rescinded a refi loan. Rates had dipped significantly, I just wanted a better deal. I had broached that subject with my broker ahead of closing, and stayed with them for the better deal (so there was no discussion about refunding sunk costs - they used the same appraisal and covered getting new credit reports). There really were no unpleasant moments about it, though I admit I was a little anxious about them possibly not acknowledging my phoned & emailed (scanned and signed attachment) rescission out of spite. But it worked out just fine.

The new lender had some kind of problem with the title company I had picked on the first try, so they got bumped out of the deal entirely. I felt a little guilty about that, mostly because after rescinding I found a better deal on the title insurance and closing and was hoping for a reason to dump them. But as it turned out, they apologized for the "runaround" in trying to make arrangements for the second closing and we parted on good terms too.

I imagine the original lender was not happy with my broker, but I never caught wind of any of that. I think the broker understood I'd be foolish to stay with the original. In defense of my fickleness, the lenders wait until very close to closing to verify employment and I assume wouldn't be shy about canceling the deal if there were a big change in circumstances on the borrower's side since "locking".


Credit goes to the "Search this Topic" function.

Edit: corrected thread reference.

Awesome, glxpass, I was going to post, but I wouldn't have remembered it nearly as well as I did back then!

Thanks all. Good info to have.

credent said: BTW, what is generally accepted as a decent commission for a mortgage broker these days?

My limited experience I've been told it's a fraction-to-one-percent of the loan amount, say 0.5 - 1%. In my case this guy is charging me 0.8% (on a 417k loan).


Thats certainly not excessive...if this is the REAL reason you are trying to cancel (vs. you found a better deal elsewhere now and just want to back out).

Its pretty scummy if you had all the fees disclosed to you, and now you just want a better deal. If they increased their fees, thats a different story. The fact you had an "unpleasant experience" isnt a valid reason to screw people (unless they were trying to screw you and charge you more)

SUCKISSTAPLES said: credent said: BTW, what is generally accepted as a decent commission for a mortgage broker these days?

My limited experience I've been told it's a fraction-to-one-percent of the loan amount, say 0.5 - 1%. In my case this guy is charging me 0.8% (on a 417k loan).


Thats certainly not excessive...if this is the REAL reason you are trying to cancel (vs. you found a better deal elsewhere now and just want to back out).

Its pretty scummy if you had all the fees disclosed to you, and now you just want a better deal. If they increased their fees, thats a different story. The fact you had an "unpleasant experience" isnt a valid reason to screw people (unless they were trying to screw you and charge you more)


Nah that's not the real reason. Not very compelled to go into the details here, but to clear the air of wild accusations, part of the bad experience includes our original mortgage broker having us work with someone else in his place, being asked to submit same information multiple times (seriously). The fees were disclosed, but the idea was that we would deal with the mortgage broker we started with, not some random guy that was unresponsive at best.

By the way, I went through with it after all, did not cancel. Thanks for your judgement calls nonetheless.

wow if you think unresponsive and passung your file to someone else abd submitting doc multiple timed is grounds for rescinding you must nit have done many refus

That is all par for the course

If you were charged what you agreed to pay and they didnt sneak in ladt minute fee hikes they dud better than most outfits

You'd be out 3rd party fees - IE: appraisal, doc transfer, perhaps "doc writing" fees.
It would stick your broker with zero... Which might be a good thing.

Expect to have to pay the 3rd party fees. The title company will likely work with you as long as you choose to refinance and use them.
Decide if the 3rd party fees are worth it.

dcg9381 said: You'd be out 3rd party fees - IE: appraisal, doc transfer, perhaps "doc writing" fees.
It would stick your broker with zero... Which might be a good thing.

Expect to have to pay the 3rd party fees. The title company will likely work with you as long as you choose to refinance and use them.
Decide if the 3rd party fees are worth it.

Where are you getting your information? Copied from a previous post in this thread:

glxpass said: See FDIC Law, Regulations, Related Acts - 6500 Consumer Protection - Section 226.23 - Right of Rescission. An excerpt:

Paragraph 23(d)(2).

1. Refunds to consumer. The consumer cannot be required to pay any amount in the form of money or property either to the creditor or to a third party as part of the credit transaction. Any amounts of this nature already paid by the consumer must be refunded. "Any amount" includes finance charges already accrued, as well as other charges, such as broker fees, application and commitment fees, or fees for a title search or appraisal, whether paid to the creditor, paid directly to a third party, or passed on from the creditor to the third party. It is irrelevant that these amounts may not represent profit to the creditor.

2. Amounts not refundable to consumer. Creditors need not return any money given by the consumer to a third party outside of the credit transaction, such as costs incurred for a building permit or for a zoning variance. Similarly, the term "any amount" does not apply to any money or property given by the creditor to the consumer; those amounts must be tendered by the consumer to the creditor under 226.23(d)(3).

credent" said: Nah that's not the real reason. Not very compelled to go into the details here, but to clear the air of wild accusations, part of the bad experience includes our original mortgage broker having us work with someone else in his place, being asked to submit same information multiple times (seriously). The fees were disclosed, but the idea was that we would deal with the mortgage broker we started with, not some random guy that was unresponsive at best.

By the way, I went through with it after all, did not cancel. Thanks for your judgement calls nonetheless.

I don't understand. If the rate and the fees didn't change, then I don't know why you would even consider canceling. The guy took on extra work to help out the guy who had family issues, so that could explain the unresponsiveness if he was already really busy.

I understand that you wouldn't want to go through the guy again, by why in the hell would you want to cancel the entire thing and then have to re-do it with someone else and send in all the paperwork again?

OP( credent).. Can you please update if you cancelled and if you have to pay any fees?

glxpass said:
Where are you getting your information? Copied from a previous post in this thread:


GLX,
I stand corrected -I'm very very surprised that 3rd party fees are refundable.

nk42 said: OP( credent).. Can you please update if you cancelled and if you have to pay any fees????
credent said: By the way, I went through with it after all, did not cancel.

Great info, guys! I have a somewhat related question. What if your refinance application gets rejected by the underwriter and you've already paid for an appraisal? Can you get the appraisal refunded or are you out the appraisal fee? Thanks!

glxpass said: Some previous posts in the stickied mortgage thread about the right of rescission:

glxpass said: SlimTim said: The rescission period is also 3 business days, so if there are holidays and weekends involved you may need 5 or 6 calendar days before the lock expiration. My last refi almost got hosed because of this, the broker LO didn't realize there was a 3 day weekend right before the expiration.
Saturday counts as a day in the rescission period. Sundays and holidays don't count. See here, for example.


glxpass said: livedog said: I'm a little curious how the rescission period works. This article "How Can the Right of Rescission Protect Me?" says

Q: Will the appraisal fee and all title and escrow fees paid also be refunded to me if I rescind my refinance mortgage?
A: The Federal Truth in Lending Act guarantees your right to a refund of ALL fees you have paid in advance of obtaining the refinance mortgage if you rescind the loan. These fees include the appraisal fee, title search fee, escrow fees, any inspection fees.

Does that mean that you would get the prepaid appraisal fees refunded? What about application fees? Must those be refunded as well?
That seems like an almost incredible amount of protection for the borrower...

It appears that indeed appraisal fees and all other fees associated with the loan must be refunded to the consumer. See FDIC Law, Regulations, Related Acts - 6500 Consumer Protection - Section 226.23 - Right of Rescission. An excerpt:

Paragraph 23(d)(2).

1. Refunds to consumer. The consumer cannot be required to pay any amount in the form of money or property either to the creditor or to a third party as part of the credit transaction. Any amounts of this nature already paid by the consumer must be refunded. "Any amount" includes finance charges already accrued, as well as other charges, such as broker fees, application and commitment fees, or fees for a title search or appraisal, whether paid to the creditor, paid directly to a third party, or passed on from the creditor to the third party. It is irrelevant that these amounts may not represent profit to the creditor.

2. Amounts not refundable to consumer. Creditors need not return any money given by the consumer to a third party outside of the credit transaction, such as costs incurred for a building permit or for a zoning variance. Similarly, the term "any amount" does not apply to any money or property given by the creditor to the consumer; those amounts must be tendered by the consumer to the creditor under 226.23(d)(3).


glxpass said: livedog said: So, does that mean you can't get the application fee refunded without actually closing and then initiating rescission? That seems really overkill... perhaps just the threat of rescission is enough to get the application fee refunded? This is all news to me. I certainly didn't think that the application fee got refunded if a borrower backed out of the refinance.
It's important to distinguish between "signing" and "closing." I believe closing means that the loan has been recorded, whereas signing obviously is when you sign the loan documents and are given copies of those documents, including disclosures. From bankrate.com - Right of rescission lets you back out of some loans (ignore the use of the term "close" and substitute "sign" for it):

bankrate.com article said: When the clock ticks ...
That clock ticks only on business days. Much has been written by federal regulators about what counts as a business day. In general, every day is a business day except Sundays and federal holidays. Saturday counts as a business day, even if the lender's office is closed on Saturdays. The right of rescission expires at midnight concluding the third full business day after the papers are signed and all other conditions are met. So, for example, if you close a home equity loan on Thursday, the clock starts ticking Friday, continues to tick on Saturday, stops on Sunday and resumes on Monday. The right of rescission ends Monday at midnight.

Because of the short time frame, rescissions are fairly rare, and IMO not a wise way to back out of a loan. Different lenders have different policies regarding refunding application fees if you decide to drop the loan before signing the documents. Personally, I think if you paid an upfront application fee that you knew was non-refundable, then that's just the risk you take if you decide to not go through with the loan because you subsequently found a better loan product elsewhere. Same with any upfront appraisal fees that you paid.

Just get all the information you need ahead of time about these fees so that you can make an informed decision. This Mortgage Professor article provides a good perspective on the rescission process and how it's used.


SlimTim said: Not a whole lot of meat to my anecdote, but I've rescinded a refi loan. Rates had dipped significantly, I just wanted a better deal. I had broached that subject with my broker ahead of closing, and stayed with them for the better deal (so there was no discussion about refunding sunk costs - they used the same appraisal and covered getting new credit reports). There really were no unpleasant moments about it, though I admit I was a little anxious about them possibly not acknowledging my phoned & emailed (scanned and signed attachment) rescission out of spite. But it worked out just fine.

The new lender had some kind of problem with the title company I had picked on the first try, so they got bumped out of the deal entirely. I felt a little guilty about that, mostly because after rescinding I found a better deal on the title insurance and closing and was hoping for a reason to dump them. But as it turned out, they apologized for the "runaround" in trying to make arrangements for the second closing and we parted on good terms too.

I imagine the original lender was not happy with my broker, but I never caught wind of any of that. I think the broker understood I'd be foolish to stay with the original. In defense of my fickleness, the lenders wait until very close to closing to verify employment and I assume wouldn't be shy about canceling the deal if there were a big change in circumstances on the borrower's side since "locking".


Credit goes to the "Search this Topic" function.

Edit: corrected thread reference.

waynejs said: Great info, guys! I have a somewhat related question. What if your refinance application gets rejected by the underwriter and you've already paid for an appraisal? Can you get the appraisal refunded or are you out the appraisal fee? Thanks!
Was your mortgage application already approved and then subsequently rejected? Why did the underwriter reject your re-fi application?

If your mortgage was approved but the appraisal came in too low, unless there were terms that state otherwise, I don't see you getting a refund of your appraisal fee.

Thanks for the reply glxpass! My refinance application hasn't been approved or rejected by the underwriter yet. Citibank took my money for the appraisal fee and locked in my rate. Now it's waiting for the appraisal. So if the appraisal comes back okay, there's still a chance that my application gets rejected, right?

glxpass said: waynejs said: Great info, guys! I have a somewhat related question. What if your refinance application gets rejected by the underwriter and you've already paid for an appraisal? Can you get the appraisal refunded or are you out the appraisal fee? Thanks!
Was your mortgage application already approved and then subsequently rejected? Why did the underwriter reject your re-fi application?

If your mortgage was approved but the appraisal came in too low, unless there were terms that state otherwise, I don't see you getting a refund of your appraisal fee.

waynejs said: Thanks for the reply glxpass! My refinance application hasn't been approved or rejected by the underwriter yet. Citibank took my money for the appraisal fee and locked in my rate. Now it's waiting for the appraisal. So if the appraisal comes back okay, there's still a chance that my application gets rejected, right?

glxpass said: waynejs said: Great info, guys! I have a somewhat related question. What if your refinance application gets rejected by the underwriter and you've already paid for an appraisal? Can you get the appraisal refunded or are you out the appraisal fee? Thanks!
Was your mortgage application already approved and then subsequently rejected? Why did the underwriter reject your re-fi application?

If your mortgage was approved but the appraisal came in too low, unless there were terms that state otherwise, I don't see you getting a refund of your appraisal fee.

Well, your refinance application should have been conditionally approved based on both the information you gave the lender when applying and the lender running a credit check. If you haven't already done so, you will probably have to give the lender documentation supporting your claimed income (e.g. paystubs), assets (e.g. bank account statements), and so on. Besides the appraisal coming in too low to qualify you for the loan, it's possible that the information you submit won't support the information you initially gave the lender and that you won't qualify for the loan after all.

But none of this, including a low appraisal, could be considered the lender's fault, and I can't see you getting your appraisal fee refunded. Depending on the reason for underwriting not approving the loan (especially if the appraisal came in too low for you to qualify for the re-fi), the lender might offer you different terms, such as a lower loan amount, higher interest rate, etc.

If the appraisal comes in OK, and if you've given the lender accurate information that you can support, it's likely the re-fi will get final approval from the underwriter and that the OK will be given to close the loan.

Thanks for the great info glxpass!

glxpass said: waynejs said: Thanks for the reply glxpass! My refinance application hasn't been approved or rejected by the underwriter yet. Citibank took my money for the appraisal fee and locked in my rate. Now it's waiting for the appraisal. So if the appraisal comes back okay, there's still a chance that my application gets rejected, right?

glxpass said: waynejs said: Great info, guys! I have a somewhat related question. What if your refinance application gets rejected by the underwriter and you've already paid for an appraisal? Can you get the appraisal refunded or are you out the appraisal fee? Thanks!
Was your mortgage application already approved and then subsequently rejected? Why did the underwriter reject your re-fi application?

If your mortgage was approved but the appraisal came in too low, unless there were terms that state otherwise, I don't see you getting a refund of your appraisal fee.

Well, your refinance application should have been conditionally approved based on both the information you gave the lender when applying and the lender running a credit check. If you haven't already done so, you will probably have to give the lender documentation supporting your claimed income (e.g. paystubs), assets (e.g. bank account statements), and so on. Besides the appraisal coming in too low to qualify you for the loan, it's possible that the information you submit won't support the information you initially gave the lender and that you won't qualify for the loan after all.

But none of this, including a low appraisal, could be considered the lender's fault, and I can't see you getting your appraisal fee refunded. Depending on the reason for underwriting not approving the loan (especially if the appraisal came in too low for you to qualify for the re-fi), the lender might offer you different terms, such as a lower loan amount, higher interest rate, etc.

If the appraisal comes in OK, and if you've given the lender accurate information that you can support, it's likely the re-fi will get final approval from the underwriter and that the OK will be given to close the loan.

anyone had any experience in exercising the right to rescission with Amerisave? Do they return any/all monies paid including the appraisal, credit fee, etc and what happens with their ridiculous $500-1000 "rate lock cancellation" fee?

I cancelled a refi in 2002. The mortgage company representative I spoke to was shocked. They had already sold the mortgage. I pointed out that I had not only strictly complied with the cancellation requirements, but had also made a courtesy call to the agent I had been dealing with to warn him. I cancelled because interest rates had dropped and I could get a better rate elsewhere. Because the mortgage company was in a box, they paid me $850 to rescind the cancellation.

peteypablo said: I cancelled a refi in 2002. The mortgage company representative I spoke to was shocked. They had already sold the mortgage. I pointed out that I had not only strictly complied with the cancellation requirements, but had also made a courtesy call to the agent I had been dealing with to warn him. I cancelled because interest rates had dropped and I could get a better rate elsewhere. Because the mortgage company was in a box, they paid me $850 to rescind the cancellation.

so essentially, you got everything back? was this with Amerisave or someone else?

Someone else. No, I did not get everything back because I withdrew my notice of cancellation. Since all I was after was the better deal I could have obtained from another lender, the $850 was enough to match that other offer. I think it would have been a nightmare for the lender to unwind after already having sold my loan.

kesco said: anyone had any experience in exercising the right to rescission with Amerisave? Do they return any/all monies paid including the appraisal, credit fee, etc and what happens with their ridiculous $500-1000 "rate lock cancellation" fee?

One guy I know rescinded with Amerisave. They can not charge you the rate lock cancellation fee if you rescind. But I don't know what happens with the other fees because this guy ended up doing a refi 2 weeks later with them... he moved from a 15 yr fixed loan to a 30 yr fixed loan, because he could get the same rate, since rates had fallen so much in the 4 weeks since he had originally locked.

Earlier in this thread, someone posted that the law seems to indicate that all fees should be repaid to the customer, even third party fees. I don't think we've had any in-practice confirmation of this though.

jb

jamzfive said: kesco said: anyone had any experience in exercising the right to rescission with Amerisave? Do they return any/all monies paid including the appraisal, credit fee, etc and what happens with their ridiculous $500-1000 "rate lock cancellation" fee?

One guy I know rescinded with Amerisave. They can not charge you the rate lock cancellation fee if you rescind. But I don't know what happens with the other fees because this guy ended up doing a refi 2 weeks later with them... he moved from a 15 yr fixed loan to a 30 yr fixed loan, because he could get the same rate, since rates had fallen so much in the 4 weeks since he had originally locked.

Somewhere in the "Best Mortgage Rates" thread, someone posted that the law seems to indicate that all fees should be repaid to the customer, even third party fees. I don't think we've had any in-practice confirmation of this though.

jb


ok thanks, very, very helpful... I'll probably end up rescinding with Amerisave.

peteypablo said: Someone else. No, I did not get everything back because I withdrew my notice of cancellation. Since all I was after was the better deal I could have obtained from another lender, the $850 was enough to match that other offer. I think it would have been a nightmare for the lender to unwind after already having sold my loan.

Only an $850 cost difference was enough to make you back out of a locked refi for another deal? I could see if the rate dropped a half-percent or something with the same costs, but that seems a little miserly. I thought I was cheap.

Nope, I'm cheaper. $850 is $850.

Just wanted to give everyone an update on my Amerisave experience.

If you cancel the loan before it closes, they subject you to a $500-$1000 penalty (dependent on your loan and/or your state).

If you exercise your right to rescind / cancel your loan after close per the Federal Truth in Lending Act, they are obligated to return 100% of the $ you paid them.

I exercised my right to rescind / cancel an hour after I closed on 8/20/2010, via USPS priority mail, certified, return receipt requested. I received back 100% of all $s paid - this includes but is not limited to the credit report fee and appraisal fee they initially charged my credit card.

Net: if you disagree with the terms of your Amerisave loan and are guaranteed the rights to rescind / cancel, rescind / cancel the loan it *after* close, not before.

Another useful way to use the right of recision is to negotiate at the closing to remove any "garbage fees" they tried to tack on or any other fees that were not fully disclosed before. As long as the value you are asking is less than around 1% of the loan amount AND interest rates have not gone up in the meantime, you can usually convince them to back down on the extra fees by threatening a recision. I would avoid trying to re-negotiate any fees that were clearly disclosed in advance since this may piss off the closing Agent enough that they won't negotiate at all. Worked for me at two refinances.

SUCKISSTAPLES said: credent said: BTW, what is generally accepted as a decent commission for a mortgage broker these days?

My limited experience I've been told it's a fraction-to-one-percent of the loan amount, say 0.5 - 1%. In my case this guy is charging me 0.8% (on a 417k loan).


Thats certainly not excessive...if this is the REAL reason you are trying to cancel (vs. you found a better deal elsewhere now and just want to back out).

Its pretty scummy if you had all the fees disclosed to you, and now you just want a better deal. If they increased their fees, thats a different story. The fact you had an "unpleasant experience" isnt a valid reason to screw people (unless they were trying to screw you and charge you more)
SIS, I am surprised with your statement "isnt a valid reason to screw people" - after reading many of you very educational posts I had an impression that any reason is good to screw other people

I'm not sure if you're still around, but I really need to ask you a question. Can you fax the cancellation request in since my expiration is tonight at midnight? I'm also using Amerisave at the moment, but can potentially save more if I just do a streamline refi through my current bank.

Thanks!

skibum1980 said: I'm not sure if you're still around, but I really need to ask you a question. Can you fax the cancellation request in since my expiration is tonight at midnight? I'm also using Amerisave at the moment, but can potentially save more if I just do a streamline refi through my current bank.

Thanks!


I'm not sure who you're asking this of, but the answer is that to be effective, you have to rescind exactly in accordance with the instructions given in your loan closing docs. Look at the doc that contains the rescission info and do it precisely per those instructions, otherwise it's not effective - even if you have a confirmed fax, handed it to the agent personally, etc. Those methods aren't effective unless the rescission instructions indicate those are acceptable methods.

You know you can also do a streamline refi with Amerisave or any bank for that matter as long as they do VA loans.


skibum1980 said: I'm not sure if you're still around, but I really need to ask you a question. Can you fax the cancellation request in since my expiration is tonight at midnight? I'm also using Amerisave at the moment, but can potentially save more if I just do a streamline refi through my current bank.

Thanks!



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