Lender Failed to Lock rate in time

[Peter Boutros]

Hello,

I have been working with a lender since October, 2016 to do a cash out refinance on my current home so I can invest in a different property. I filled out all the necessary paper work and signed the mortgage commitment form at 3.5% interest rate and sent all the required documents before the deadline.

I confirmed with the loan officer that the rate was locked in November. Just two weeks ago the loan officer comes to me with a new proposal of a larger cash out loan but 5% interest rate promising me rates will go down to 3.5% in June with a rate and term refinance. I knew something did not sound right and contacted their main office only to find out they had never locked my original rate at 3.5%. Now the rates are no where near that rate and cannot match it.

I was furious, I lost a great opportunity because of their mess up, lost the appraisal free and got my credit score pulled for no reason. They say they will refund me the appraisal fee but it will take 2-3 weeks (I have a feeling they will not send anything).

What would you do if you were in my shoes?

[Stephanie Medellin]

@Peter Boutros  That really sucks, sorry to hear that.  For future reference, any time the rate is locked you should get a new loan estimate automatically sent to you (within a day or two).  If you don't receive one, definitely follow up to make sure.  The student loan statement shouldn't hold up locking a rate.  I'm thinking he was probably uncertain how long processing would take and didn't want to lock too soon.  That's not an excuse for lying though.  He could have locked for 45-60 days. 

Your loan officer has absolutely no way to know what rates are going to do in June, that's ridiculous. 

As for the higher rate, yes rates definitely went up after the election and unfortunately have not come back down. Other things can also contribute to raising your rate - if you're increasing your loan amount, you might be increasing your LTV, and therefore getting a higher rate or higher pricing. If your appraisal came in higher than expected, then maybe you are still at the same LTV.

That is a really unfortunate situation and I feel bad that you received such awful service.