Mortgage and Real Estate Horror Stories
Sheyna
Steiner
Bankrate.comStrange and scary happenings at the witching hour
We
were in the process of financing a beach home in the panhandle of Florida. We had been approved for a mortgage; the rate was locked (a low rate that we were happy to qualify for) and the closing date was set. I drove from Indiana to Florida expecting to close, I had power of attorney to sign my husband's name on all of the papers and I was all set. The
afternoon before the closing, scheduled for 8 a.m., I received a phone call from the mortgage company, supposedly one of the "best" on the Emerald Coast. A man, with whom I had never spoken, announced that he was "taking over" our file and he regretted to say that we did not qualify "after all" for the lower interest rate. I was beside myself. My husband said that we should cancel doing business with them and move on to another company. Unfortunately, the closing was imminent and I did not even know who to call for help. Our
situation was unique. We had to move on the loan quickly, because our private, interest-only loan we had already secured for the home was ending and we needed new financing immediately. I
asked the man on the phone what he actually did for the company and why had our file been given to him. His response: "This is what I do, deliver the bad news." I
wish I could say that I did go with another mortgage company and called their bluff, but I didn't. I was just glad to sign those papers and get out of there. I still cringe, four years later, when I see the advertisements for that mortgage company -- the glossy picture of the woman who is the top dog of that agency smiling out at me. The
refi that never was
I have been trying to refinance my mortgage since April 2006. The mortgage company's name is Monster Mortgage; they are a subsidiary of Monstrous Mortgage Corp. I began the deal with one monster that I was later told left the company. Approximately two or three weeks after sending this particular monster my information to get the refinance started, MonsterMatt called to tell me that he was taking over the file. He
claimed that the refinance could be completed within two weeks. After the two weeks were up, MonsterMatt told me that the mortgage company needed additional pay stubs. I sent them the same day. A
few weeks later, around June 28, I received a packet from them. The numbers were all wrong, I had asked him for a one- or two-year ARM, interest-only, and he gave me a 40-year loan with an interest rate of 8.77 percent. I
explained to MonsterMatt that this was not the deal we had discussed. He had a million excuses and explanations. A few more weeks passed and MonsterMatt told me that the loan had gone through and everything was almost done. As to the question of closing, he stated that the underwriters had the file and that they would have an answer within a few days. By the time we spoke again the next week, MonsterMatt said that the underwriters had decided that they needed updated pay stubs again. I quickly complied. By now it was early July and I asked MonsterMatt if I needed to pay my current mortgage company. He said no, everything is done. All the numbers are in the buyout. I asked again and he was absolutely certain that I did not need to pay my current mortgage company. In
late July, MonsterMatt faxed me another good-faith estimate, with different numbers. The numbers were, again, not what we had discussed. Again, I asked if I needed to pay my mortgage company, still he said no, everything is done. Because I didn't want to start all over again, I just kept listening to MonsterMatt. In
August 2006, they needed pay stubs again from my wife. No problem, sent them the same day. From what I understand now, the mortgage company they were using, Graveyard Ghouls Mortgage, backed out of the agreement because, by now, I was 60 days behind on payments. Now
I am on the verge of going into foreclosure without a refinance that should have been done and completed back in May or June at the latest. I'm speaking with my current mortgage company to see if we can work something out. I want to keep my home! A
taxing dilemma
I was in the market for a house last year. I was shown a house and the real estate agent told me that the taxes were $1,800 a year. That's what was on all of the materials about the house. I bought the house, and a few months after closing, I received a statement from the tax assessor informing me that the taxes on my property were nearly $7,000 a year! Needless to say, that kind of changed the monthly mortgage-payment figure. I
talked to some of my neighbors about it, and they were hit with the same thing. We live in a new development and the taxes were based on the land before it was built upon. As soon as we bought our houses, they were reassessed. Nobody was warned about it, and everyone was angry. I think the real estate agents should have some responsibility for explaining to buyers what the real taxes will be. Real
estate shenanigans on Zombie Island
My wife and I contracted to purchase a home under construction for $242,000. This was a home that a group of real estate investors, incorporated as an LLC, had contracted to build with a reputable builder. We
waited patiently for six months for the construction to complete so we could finally take ownership. In the meantime, prices within the neighborhood increased substantially. That same home was now worth almost $30,000 more after six months of construction. The builder of the home ran a couple of weeks behind on completing the house and, therefore, the closing date on the contract could not be fulfilled. Now with the home complete and the certificate of occupancy ready to be issued, the investor group sent a letter demanding a substantially higher price saying that we did not fulfill the contract by closing on the date in the contract. Obviously, we could not close on the house since it was not complete and a certificate of completion had not been issued. Further, they were the ones that hired the builder and they made me sign an addendum to the contract saying that I could not seek restitution if the builder is late. I had my contract reviewed by several attorneys who confirmed that they had no right to raise the price or to break the contract. Ultimately,
we did not close on the house since they refused to fulfill the contracted price. Right before filing the lawsuit, we even offered an additional $3,000, but they did not budge. We purchased another home a couple of miles away a few months later. I currently have a lawsuit pending against the investment group for damages. My real estate agent later learned that they had done the same thing to others. I was the only one who did not pay up and instead sued. Even the listing agent on the house had called my attorney to say that she was in disagreement with the real estate group over the matter. The
mortgage broker in the closet
About a year ago my husband and I purchased our first home. My credit score was a bit higher than his and the mortgage broker decided to run the numbers to see what would happen if the loan was in my name only. To put the loan in my name alone ended up saving about $60 a month. Two days before closing, the mortgage broker faxed me the papers to review and each place my name appeared, the phrase, "a single woman" accompanied it. I
called him to ask about the wording. He told me that if he changed it now, the sellers could back out of the deal and we'd lose our $10,000 deposit on the house. He also said that if I were to report him he'd lie and say that I represented myself as a single woman since day one. So, I went to the closing by myself and signed the papers. We didn't want to lose the money and figured no one would ever find out. Back
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