Loan Officer Misrepresented Term

[Amanda0602]

Jurisdiction

Ohio

So we are in the middle of a home refinance. We were approved and we were deciding between a cash out option and paying off our Home Equity Line of Credit. The loan officer told us on a recorded line that our best option would be to pay off the home equity line of credit because the account would stay open and we would have access to those funds through the end of our draw period which is 4 years since we weren't sure how much we would need to get the things done that we wanted. So we agreed and went this way. Now we are a couple weeks away from closing and I read an article that tells me the opposite of what the loan officer said. I just spoke to his manager and he basically said oops he shouldn't have said that. We have already signed contracts to do home repairs and just learned this. Is there any recourse we have?

 

[adjusterjack]

Is there any recourse we have?

Other than walking away from the new loan. No.

My advice to you is to stop relying on what people "tell" you and verify it for yourself.

Read your HELOC contract to see what's what. Should have done that in the first place.

 

[Amanda0602]

No reason to be rude - - - my apologies that I am not well versed in mortgages and loans and rely on a loan officer to give me truthful information. Since this was addressed on a recorded line and his manager has listened and verified that he gave us incorrect information there is no "tell". As an investment broker I am held responsible for the things I tell people, so why should I think a loan officer should be held to different standards?

 

[zddoodah]

The loan officer told us on a recorded line that our best option. . . .

Just to be clear about this: "your best option is ___" is an expression of opinion that cannot form the basis of any legal claim

Now we are a couple weeks away from closing and I read an article that tells me the opposite of what the loan officer said.

In other words, the author of the article expressed a different opinion than the loan officer.

Is there any recourse we have?

Based on your description of what occurred, no legal wrong occurred. You can't base a viable legal claim on "some article said exactly the opposite." What makes you think the article is any more valid than what the loan officer said. That the guy "shouldn't have said" what he said doesn't make it legally actionable.

P.S. There was nothing whatsoever "rude" about what "adjusterjack" wrote.

 

[Amanda0602]

I realize I cannot base it on what an article said. This is why I contacted his manager to confirm the truth. Therefore it is not based upon an article the facts are based on the recorded telephone conversation. The manager has stated that we were provided false information. This action is what drove us to pursue the course of the loan. We have now paid $1,000.00 for a loan that was misrepresented.

And as far as rude stating that I should have read the HELOC first - I did read the HELOC and it states that the HELOC does not need to be terminated that there would need to be a change in subordination. The termination of the HELOC is the Lender's policy not the Credit Union. Therefore in stating refinance to free up your existing Home equity funds is a direct statement, not an opinion, nit a maybe. We were specifically told that we would have access to those funds.

 

[adjusterjack]

We were specifically told that we would have access to those funds.

Told by the new loan lender but not by the HELOC lender?

 

[Amanda0602]

Told by the new loan lender but not by the HELOC lender?

Correct. That's is the only reason that we went with the loan rolling in the HELOC because it has higher fees than the cash out option.
Since we weren't sure how much our daughters tuition would be for the next semester the Loan Officer told us to refinance and roll in the HELOC rather than do cash out so that we didn't pull more out of our house than needed. ie we could take out the exact amount needed from the HELOC rather than guessing and taking more cash out than needed

 

[Zigner]

Correct. That's is the only reason that we went with the loan rolling in the HELOC because it has higher fees than the cash out option.

Why do you believe that the non-affiliated loan officer has any clue about the terms of your HELOC?

 

[Amanda0602]

Why do you believe that the non-affiliated loan officer has any clue about the terms of your HELOC?

Because he had our HELOC information as we had uploaded it and he stated that he had looked into both options.

 

[zddoodah]

I realize I cannot base it on what an article said.

Let's back this up.

What factual statements (not statements of opinion) did the loan officer make that you believe to have been false?

For each statement, please indicate whether you believe the loan officer knew it to be false or was simply mistaken. If you believe any statement was knowingly false, why do you believe that?

What information did you subsequently receive, and from whom did you receive it, that led you to conclude the statements were false?

In your original post, you wrote that you "just spoke to [the loan officer's] manager and he basically said oops he shouldn't have said that." Why shouldn't he have said that?

How, and in what amounts, do you believe you have been or will be damaged as a result of the false statements?

 

[zddoodah]

Private message received from the OP:

Fact - the loan officer stated that even though the fees were higher we could roll the HELOC into the refinance and free up the funds to be used as needed for tuition rather than taking a lump sum out. He stated that we would be paying higher fees up front and in total, but it would guarantee the funds remain available in the HELOC
Fact - the fees for this loan total over $10,000 which is more than the simple cash out refinance.
Fact the manager reviewed the call and stated that the Loan Officer should not have said that as it is untrue. It is their standard practice as a company to request HELOC's be closed. He apologized that his Loan Officer misrepresented the terms.
As far as whether the Loan Officer intentionally did this, I don't know. I would hate to think that of anyone.
However, I fully believe that the difference in the fees should be refunded and the loan should be changed to the cash out. I don't believe I should be paying almost $4,000 more in fees for this loan.

When you asked for this, what response did you recieve?

 

[adjusterjack]

You also wrote:

I did read the HELOC and it states that the HELOC does not need to be terminated that there would need to be a change in subordination. The termination of the HELOC is the Lender's policy

In other words, the HELOC could have remained open for you to continue drawing on. So, in a sense, the new loan officer was correct. Unfortunately, the HELOC lender didn't want that option.

 

[Amanda0602]

I spoke with the HELOC Lender and they did not initiate closing the refinance company did. The HELOC lender stated that we still had enough equity in the home to keep the loan open. It was the refinance company that requested the close after they told me that it would remain open.

 

[Amanda0602]

Private message received from the OP:



When you asked for this, what response did you recieve?

I was told that it is too late in the process to change

 

[adjusterjack]

I spoke with the HELOC Lender and they did not initiate closing the refinance company did. The HELOC lender stated that we still had enough equity in the home to keep the loan open. It was the refinance company that requested the close after they told me that it would remain open.

You can argue this forever but the reality is that there is no breach of contract or any other grounds for a lawsuit, if that's what you are asking. You haven't been monetarily damaged in a "legal" sense, just inconvenienced and frustrated because you relied on what you were "told" (always dangerous) without verifying it. If you think you want to sue somebody, talk to a lawyer. Otherwise, it's time to move on.

 

[Amanda0602]

Please note - I was not looking to sue anyone - I was financially harmed as this loan carried $3,000 more in fees. I escalated to a regional supervisor. They will be correcting the loan and refunding the difference this week. They are keeping our closing and extended our rate lock. Not to be mean to anyone on here, however, I am most definitely removing my membership. It seems as though people are spoken down to and not real advice that is helpful is offered. Just a bunch of suck it ups. I am happy that I did not listen and that the company admitted their mistake and I correcting the situation......

 

[Zigner]

Please note - I was not looking to sue anyone - I was financially harmed as this loan carried $3,000 more in fees. I escalated to a regional supervisor. They will be correcting the loan and refunding the difference this week. They are keeping our closing and extended our rate lock. Not to be mean to anyone on here, however, I am most definitely removing my membership. It seems as though people are spoken down to and not real advice that is helpful is offered. Just a bunch of suck it ups. I am happy that I did not listen and that the company admitted their mistake and I correcting the situation......

You seem to have a misunderstanding as to the purpose of this forum. This forum is here to provide legal information. The fact that your lender has decided to take action from a customer-service standpoint (without any legal requirement to do so) does not mean that you received incorrect information.