Posted on: 13th Mar, 2010 07:06 am
Hello,
My wife and I used a Mortgage Broker to get pre approved thru, we then contracted on the home and signed the papers to get the loan stated. We paid for an appraisal and he sent us a Commitment Letter after he got us approved and locked in the rate.
However, our realtor said that we may be able to get a lower rate with her lender, so we applied with her Mortgage Broker who beat the 1st Mortgage Broker's rate, so we decided to go with the lower rate Broker.
Well, you would have thought we commited a mortal sin! Granted, we should have told the other broker we found a better deal, but he is telling us we owe him $5,375.00 of a Brokerage Fee.
Are we legally resonsible to pay this fee to him? He has retained an attorney and plan to take us to court!
What can we do????? HELP!!!!!!
My wife and I used a Mortgage Broker to get pre approved thru, we then contracted on the home and signed the papers to get the loan stated. We paid for an appraisal and he sent us a Commitment Letter after he got us approved and locked in the rate.
However, our realtor said that we may be able to get a lower rate with her lender, so we applied with her Mortgage Broker who beat the 1st Mortgage Broker's rate, so we decided to go with the lower rate Broker.
Well, you would have thought we commited a mortal sin! Granted, we should have told the other broker we found a better deal, but he is telling us we owe him $5,375.00 of a Brokerage Fee.
Are we legally resonsible to pay this fee to him? He has retained an attorney and plan to take us to court!
What can we do????? HELP!!!!!!
I really all depends upon what documents you signed with him. The reality is that he DID do a lot of work on your behalf. So, you probably should at least owe him some kind of application fee. You will also have to pay for that appraisal.
Hello Eric,
Thanks for responding. This guy is telling me that because I signed a contract and he obtained a commitment on our behalf, that his total brokerage fee. He says that it's irrelavent that I did not close the loan.
He says that we defaulted on the contract, but don't I have to actually close the loan?
My realtor is telling us that I should report him for trying to collect on the contract.
How can I get out of paying this fee?
Thanks for responding. This guy is telling me that because I signed a contract and he obtained a commitment on our behalf, that his total brokerage fee. He says that it's irrelavent that I did not close the loan.
He says that we defaulted on the contract, but don't I have to actually close the loan?
My realtor is telling us that I should report him for trying to collect on the contract.
How can I get out of paying this fee?
I don't think you would be able to avoid paying the fees, Allen. However, you can negotiate with the broker and check out if he could lower the fees for you.
>>Are we legally resonsible to pay this fee to him?
No, and the loan commitment he got for you isn't a contract. It happens all the time and is the way our industry works - that's what our RESPA laws are all about. Homeowners are encouraged to shop lenders, and you can move to another lender anytime you want to. The only fees you'll owe your current lender are for your credit report, and you'll always owe the Appraiser for the Appraisal, but you can pay the Appraiser directly if you'd like. But even then, most of us don't try to collect for the credit report because it's only 10-20 dollars.
I love it when I'm able to offer a homeowner lower fees and they move to me from another Lender.
I agree with your Realtor - you should report that guy. That's the risk a Loan Officer takes when he floats the interest rate. If rates fall, and you've already locked the interest rate, the consumer may decide to switch lenders if they receive a better offer.
No, and the loan commitment he got for you isn't a contract. It happens all the time and is the way our industry works - that's what our RESPA laws are all about. Homeowners are encouraged to shop lenders, and you can move to another lender anytime you want to. The only fees you'll owe your current lender are for your credit report, and you'll always owe the Appraiser for the Appraisal, but you can pay the Appraiser directly if you'd like. But even then, most of us don't try to collect for the credit report because it's only 10-20 dollars.
I love it when I'm able to offer a homeowner lower fees and they move to me from another Lender.
I agree with your Realtor - you should report that guy. That's the risk a Loan Officer takes when he floats the interest rate. If rates fall, and you've already locked the interest rate, the consumer may decide to switch lenders if they receive a better offer.
Raymond, you worm!
The broker has every right to sue for his or her fees. The borrower signed a contract pinhead! Offer and acceptance was made and the Broker was upholding his or her end of the deal.
RESPA protects consumers, but does not side with consumers who default on a contracts D HEAD! Why the heck do we even have a F contract signed if it's 100% unenforcable?
Raymond, you are the kind of worm that makes me sick! You have never been to court to collect your fees have you? NO! You are talking out of your @SS and don't know Shet!
So what is the borrower signed a purchase contract with the Realtor and a week before closing tried to bring in another realtor who would rebate them for closing costs?
LOSER!
The broker has every right to sue for his or her fees. The borrower signed a contract pinhead! Offer and acceptance was made and the Broker was upholding his or her end of the deal.
RESPA protects consumers, but does not side with consumers who default on a contracts D HEAD! Why the heck do we even have a F contract signed if it's 100% unenforcable?
Raymond, you are the kind of worm that makes me sick! You have never been to court to collect your fees have you? NO! You are talking out of your @SS and don't know Shet!
So what is the borrower signed a purchase contract with the Realtor and a week before closing tried to bring in another realtor who would rebate them for closing costs?
LOSER!
>>The broker has every right to sue for his or her fees.
Yep, everybody has a right to sue - that's for sure.
>>The borrower signed a contract pinhead!
No they didn't. Purchase Agreements don't include Mortgage Bankers or Brokers. And nobody has contracts like that on the side - it'd be a RESPA violation and we'd be removed from the industry.
Yep, everybody has a right to sue - that's for sure.
>>The borrower signed a contract pinhead!
No they didn't. Purchase Agreements don't include Mortgage Bankers or Brokers. And nobody has contracts like that on the side - it'd be a RESPA violation and we'd be removed from the industry.
Raymond!
Exactly what do you think the Mortgage Brokerage Fee Agreement or Mortgage Broker Contract is? You must work for a Bank as they pay by the hour and the reps don't invest near the time and effort in each deal as a Broker does. Banks don't have borrowers sign a contract, we do or clients would use and abuse use to no end!
Why are you so ANTI Broker? Why does your mindset of we are the only professionals on the planet that if we stand ready to fullfill our contractual obligations, and the client chooses to default, that we are not due our fee?
Our Broker Contracts have nothing to do with the Purchase contract the realtors have signed.......PINHEAD!
Now more than ever, borrowers are finding the need for Mortgage Brokers to get the job done and to use to get a better deal than any one bank offeres.
We are in the saddle with these borrowers from day one, thru short sale after short sale, rebuilding their credit, being avalible weekend and after hours for months on end, only to have a worm like you try to step in 2 weeks before closing and try to steal our borrower with your worm like mentality telling them they don't have to do what's right an complete the deal with the broker.
You spinless worm!
Exactly what do you think the Mortgage Brokerage Fee Agreement or Mortgage Broker Contract is? You must work for a Bank as they pay by the hour and the reps don't invest near the time and effort in each deal as a Broker does. Banks don't have borrowers sign a contract, we do or clients would use and abuse use to no end!
Why are you so ANTI Broker? Why does your mindset of we are the only professionals on the planet that if we stand ready to fullfill our contractual obligations, and the client chooses to default, that we are not due our fee?
Our Broker Contracts have nothing to do with the Purchase contract the realtors have signed.......PINHEAD!
Now more than ever, borrowers are finding the need for Mortgage Brokers to get the job done and to use to get a better deal than any one bank offeres.
We are in the saddle with these borrowers from day one, thru short sale after short sale, rebuilding their credit, being avalible weekend and after hours for months on end, only to have a worm like you try to step in 2 weeks before closing and try to steal our borrower with your worm like mentality telling them they don't have to do what's right an complete the deal with the broker.
You spinless worm!
I have more to say, and it's pretty good information that's based upon my Mortgage Broker tenure, but won't, because you're just too childish, and can't be taken seriously. If you want to be successful in our industry, you need to upgrade your behavior. Once you do, you'll be considered a Peer and other Professionals will communicate with you again.
Raymond is correct and anyone who has taken the required education per the SAFE Act would know he is correct.
One of the reasons the SAFE Act was passed was to stop the the kind of incorrect conduct that is described.
One of the recommended courses of action is to report RESPA violations. Publicly posting such a violation is pretty risky. It is like telling on yourself.
We are not talking about whether the broker is angry and feels abused and is losing income. We are talking abount what he is allowed to do.
One of the reasons the SAFE Act was passed was to stop the the kind of incorrect conduct that is described.
One of the recommended courses of action is to report RESPA violations. Publicly posting such a violation is pretty risky. It is like telling on yourself.
We are not talking about whether the broker is angry and feels abused and is losing income. We are talking abount what he is allowed to do.
raymond and john,
you both are unbelievable in how you are trying to make the loan person out to be the bad person here because they are demanding payment of an earned broker fee from a contractual obligation that the client agreed to!
if the broker had the borrower approved and locked and stood ready willing and able to deliver the rate, terms and costs agreed to in the broker contract, and if that broker contract said that if the borrower defaults on the contract that they agreed to pay the brokerage fee, then why on earth would you say it's wrong for the broker to demand payment?
respa is in place to protect consumers, not to be used as a tool to steal from mortgage professionals who have a valid contract and are suffering from default of contract by the borrower. respa is not a license to use and abuse mortgage professionals!
i'll bet it's safe to say that neither one of you have ever actually enforced a contract in court, because if you had and done everything correctly, you would find that the courts would side with the broker.
please educate the forum and tell us exacly where to see the respa rules that says it's illigal to demand payment of a broker fee after a loan commitment has been obtained under the terms and conditions set forth in the contract that was signed and agreed to by the borrower. (not including a refinance of a primary residence)
come on, show the forum how smart you both are and exactly what you know! let's see you put some facts with your statements to the forum!
or, or, or could it be, you really don't know what you are talking about, so you try to scare everyone with throwing things around like respa, safe act, etc. to give the illusion that you do?
the forum is waiting on your responses....................
you both are unbelievable in how you are trying to make the loan person out to be the bad person here because they are demanding payment of an earned broker fee from a contractual obligation that the client agreed to!
if the broker had the borrower approved and locked and stood ready willing and able to deliver the rate, terms and costs agreed to in the broker contract, and if that broker contract said that if the borrower defaults on the contract that they agreed to pay the brokerage fee, then why on earth would you say it's wrong for the broker to demand payment?
respa is in place to protect consumers, not to be used as a tool to steal from mortgage professionals who have a valid contract and are suffering from default of contract by the borrower. respa is not a license to use and abuse mortgage professionals!
i'll bet it's safe to say that neither one of you have ever actually enforced a contract in court, because if you had and done everything correctly, you would find that the courts would side with the broker.
please educate the forum and tell us exacly where to see the respa rules that says it's illigal to demand payment of a broker fee after a loan commitment has been obtained under the terms and conditions set forth in the contract that was signed and agreed to by the borrower. (not including a refinance of a primary residence)
come on, show the forum how smart you both are and exactly what you know! let's see you put some facts with your statements to the forum!
or, or, or could it be, you really don't know what you are talking about, so you try to scare everyone with throwing things around like respa, safe act, etc. to give the illusion that you do?
the forum is waiting on your responses....................
Mr. Man,
You are absolutly correct, respa is not saying a broker's contract is completely unenforceable, they are simply making sure the consumer does not get done wrong. As most brokers, it's been my experience that the consumer is 5 times more likely to do the mortgage broker wrong than the other way around, especially these days.
If the broker that the borrower is talking about in the initial post had offer and acceptance of contract, obtained a commitment at the same rate, program and costs quoted, then they deserve to be paid what was agreed to in the contract. Granted, it's the borrower's right to switch lenders at any time, however, it does not release them for any contractual obligations they have prior.
What level headed, honest and decent person would dispute this? Only a dishonest, underhanded person would disagree.
These two guys, Raymond and John are wrong and they will respond without any hard facts from any respa guidelines, if they respond at all.
Here's a question for Raymond and John, what about an Exclusive Buyer's Agent Agreement, can a realtor enforce that contract? Can a realtor demand their fee after they work with a buyer for a month, showing them 20 homes and get a contract on a home only to have the buyer try to bring in another realtor right before closing that will rebate them back money?
Tell the forum your thought Raymond and John.
You are absolutly correct, respa is not saying a broker's contract is completely unenforceable, they are simply making sure the consumer does not get done wrong. As most brokers, it's been my experience that the consumer is 5 times more likely to do the mortgage broker wrong than the other way around, especially these days.
If the broker that the borrower is talking about in the initial post had offer and acceptance of contract, obtained a commitment at the same rate, program and costs quoted, then they deserve to be paid what was agreed to in the contract. Granted, it's the borrower's right to switch lenders at any time, however, it does not release them for any contractual obligations they have prior.
What level headed, honest and decent person would dispute this? Only a dishonest, underhanded person would disagree.
These two guys, Raymond and John are wrong and they will respond without any hard facts from any respa guidelines, if they respond at all.
Here's a question for Raymond and John, what about an Exclusive Buyer's Agent Agreement, can a realtor enforce that contract? Can a realtor demand their fee after they work with a buyer for a month, showing them 20 homes and get a contract on a home only to have the buyer try to bring in another realtor right before closing that will rebate them back money?
Tell the forum your thought Raymond and John.
Raymond and John,
Me, Mr. Man and the rest of the honest brokers on the forum wait your response to our questions above.
Please don't simply avoid responding because you can't back up your claims and so called facts you throw around. The forum deserves to be told info they can rely on as facts, don't you think?
We are waiting guys................
Hey, why has Mr. Rogers a.k.a George not jumped into the discussion? Where are you Mr. Rogers? Hope getting an update picture to post vs. the current DUI picture. lol
Me, Mr. Man and the rest of the honest brokers on the forum wait your response to our questions above.
Please don't simply avoid responding because you can't back up your claims and so called facts you throw around. The forum deserves to be told info they can rely on as facts, don't you think?
We are waiting guys................
Hey, why has Mr. Rogers a.k.a George not jumped into the discussion? Where are you Mr. Rogers? Hope getting an update picture to post vs. the current DUI picture. lol
still waiting Raymond and John...???
Raymond, John, George, where arrrrrrrrrrrr youuuuuuuuuu?
See, they will not respond because they are wrong in the above posts.
Read the above.
NY Joe, I like the way you think Brother! Let's you and I bring some facts to this forum!
See, they will not respond because they are wrong in the above posts.
Read the above.
NY Joe, I like the way you think Brother! Let's you and I bring some facts to this forum!
The question is how much time do I want to invest to educate brokers. I am not willing to invest too much time.
You are kind of correct, I can not quote anyplace in RESPA that prohibits such a thing. I am not interested in looking there to see if I can find anything that supports my claim.
My claims are facts. Tell me what state or state a mortgage broker can have an enforceable contract to be allowed to collect anything outside of closing.
I will, however, refer you to most state regulations which note that it is prohibited conduct for any mortgage broker to make any arrangements for any payment outside of closing. A broker's fee is permitted if disclosed to the lender and is paid at closing.
If your state is different so be it. Continue to make contracts and continue to be paid by suing outside of closing. In most states, those contracts are not legal in the first place, so, difficult to sue and collect on an unenforceable contract.
We are not talking about whether or not anyone did any work and wants to get paid for it. When it happens to me, I do not like it any more than you.
Just a word of caution. Double check and make sure such cotracts are ok in your state by reading more than RESPA. You have to read more than RESPA to pass the now rrequired NMLS eduaction and testing. If you sue or threaten to sue and some one reports you to whomever, you stand to lose more than a fee, you lose a license. However, if your state regards broker contracts as being acceptable, continue to operate as you have been.
I have never tried to enforce a contract in court. We have broker fee agreements, not contracts. the agreements correctly state that no one owes us anything if there is no closing, so, no need to go to court.
I am not trying to scare mortgage lenders by tossing things around like RESPA,SAFE Act, etc. It seems more like you are trying to scare cosumers by tossing those around.
Tell us what states you can have such broker contracts. If I am licensed in that state, I will tell you where to find the info. If I am not licensed in that state, I will go to Broker Outpost and find out from brokers in those states. I do not mind being corrected.
Realtors operate under different regulations. They do not operate under state mortgage regulations (actually, some do in certain regards as far as mortgages are concerned, nothing to do with exclusive agent contracts)
You are kind of correct, I can not quote anyplace in RESPA that prohibits such a thing. I am not interested in looking there to see if I can find anything that supports my claim.
My claims are facts. Tell me what state or state a mortgage broker can have an enforceable contract to be allowed to collect anything outside of closing.
I will, however, refer you to most state regulations which note that it is prohibited conduct for any mortgage broker to make any arrangements for any payment outside of closing. A broker's fee is permitted if disclosed to the lender and is paid at closing.
If your state is different so be it. Continue to make contracts and continue to be paid by suing outside of closing. In most states, those contracts are not legal in the first place, so, difficult to sue and collect on an unenforceable contract.
We are not talking about whether or not anyone did any work and wants to get paid for it. When it happens to me, I do not like it any more than you.
Just a word of caution. Double check and make sure such cotracts are ok in your state by reading more than RESPA. You have to read more than RESPA to pass the now rrequired NMLS eduaction and testing. If you sue or threaten to sue and some one reports you to whomever, you stand to lose more than a fee, you lose a license. However, if your state regards broker contracts as being acceptable, continue to operate as you have been.
I have never tried to enforce a contract in court. We have broker fee agreements, not contracts. the agreements correctly state that no one owes us anything if there is no closing, so, no need to go to court.
I am not trying to scare mortgage lenders by tossing things around like RESPA,SAFE Act, etc. It seems more like you are trying to scare cosumers by tossing those around.
Tell us what states you can have such broker contracts. If I am licensed in that state, I will tell you where to find the info. If I am not licensed in that state, I will go to Broker Outpost and find out from brokers in those states. I do not mind being corrected.
Realtors operate under different regulations. They do not operate under state mortgage regulations (actually, some do in certain regards as far as mortgages are concerned, nothing to do with exclusive agent contracts)