I want to sue my Mortgage Broker. What are my chances of finding a lawyer that will represent me and winning?

Question

My mortgage broker withheld information that my interest only amount was a teaser rate. After 3 months, went from 2400.00 month to 4100.00. Unreachable. Now in horrible situation, can't refinance - no equity in this market. He also misrepresented our income and called it "stated". We did sign the papers but didn't notice what he had put down as our income. Was almost double. Isn't there anything we can do?

Answer 1

Ok, let's get real for a moment here. Far too many people are coming out of the woodwork singing this same song. Now it must be hard to deal with the fact that you made a mistake buying more house than you could afford, but it's getting old blaming brokers for it. I assume you can do 3rd grade math, so how is it that you could not add and figure out that 2400/month could not possibly add up to a 30 year fully amortized loan on the amount you were financing? And another thing, there is NO WAY that you got a loan that was interest only for just 3 months and there is NO WAY that an interest only payment would jump to a 4100 payment EVER. Not only did you not read what you signed, but you still don't understand what you have.

You had to sign a good faith estimate. You had to sign the 1003 (The application which stated your income). You had to sign multiple loan documents at closing, and you read none of them? You knew your payments were supposed to be $4100. Math is math. You had selective hearing and only heard what you wanted to hear. Like so many others YOU and YOU alone are to blame and NO lawyer will take your case, because YOU have none. Stop blaming people for your actions. You wanted a $2400 payment on a house that YOU knew YOU could not afford.

And finally, what difference does what was written down as your income have. YOU knew what your real income was. YOU knew what the payment was. YOU still signed the papers.

How many brokers did you walk away from before you chose this one? How many gave you a rate that you then said "I can do better than that". "Joe blow mortgage broker said they can do this". You did this to yourself trying to save a buck. You were looking for "the best deal" and you got it. Now live with it. Next time someone tells you "it may cost a bit more but in the long run ..." LISTEN TO THEM!

Answer 2

Thank You Doogie Howser. The math does not compute. If you bought a home with 2400 I/O payments that is some house. Interest Only (I/O) is calculated by multiplying your loan amount times the interest rate and dividing by 12. If you bought a $800,000 say at 6% I/O your monthly payment would be $4000. Buy you said teaser rate so I think COFI or Option ARM. that rate would be 1.25 or 1.5% and that would compute to about $1000/mo. So for our example lets say you had a 3% teaser rate that lasted for 3 months. You would have been paying $2000/mo. Get your paperwork out and read it. If you didn't understand the loan before you closed, you should have asked questions. If your broker could not answer the questions, you should have gone to a different broker. Not all Brokers are like this and there are many good ones out there. Would you have done this with a car purchase? I think not! This was the biggest purchase you will ever make and what you are saying is that you didn't pay any attention to it. Anyone can do the math - You should know that a $650,000 mortgage will not have a monthly payment of $2400 and pay off ever.

As for Stated Income Loans - there is another subject. If you are self employed and like most self employed you write off as much as you can and then some and you pay less taxes than those of us that have a W-2. But then you want to be able to qualify for a huge home with large payments but your taxes say you only make $2000/mo. Which do you want, a better loan or to pay less taxes, it doesn't seem like you can have both now does it. Stated Income loans were made for these types of situations, but lenders allowed them on wage earners and not just the self employed and since they also carry more risk they have higher rates and terms. Some states have limited or outlawed Stated Income loans altogethers. Borrowers have as much responsibility in this as Brokers do.

On the other hand, Option Arms are very good for some people that have huge fluctuations in their income and can handle having varying payments on their home. They can choose from the minimum payment, an I/O payment a bi-weekly payment or a fully indexed and amortizing payment. They work for good money managers.

Answer 3

The problem is this: somewhere in that mass of paperwork you signed there's almost sure to be something that tells the truth about the rate change after 3 months. And you also signed the paper with the falsified income. All that puts you in a very bad situation and hurts your chances for winning a lawsuit, since the idiot broker has your signature saying that you WERE informed of all of the rate situation, and stating that the falsified income is true.

That said, do see a lawyer to see what recourse you might have. Your problem is that you are now living in a house you just plain can't afford, and should never have been able to buy. There's been so much of this kind of thing around lately that it has the whole housing market pretty well destroyed temporarily. You might or might not be able to collect some damages from him, but it's not likely that you are going to be able to keep the house unless you can find some way to afford it.

Good luck..

Answer 4

What happened to you, has happened to so many people!!
Banks were really greedy, the broker didnt understand and less the buyers, we have the same problem all over and nobody is doing anything, you should first complain with the department of real estate in your city, did you put any down payment? if not just walk away, and let the bank eat their mortgage, they are crooks, they knew that people couldn't make the payments but Lethe wanted people keep the houses for a couple of yrs and then get then back at a higher price, but all the sudden the market came down and now they are loosing money too, it has been a very bad thing for consumers, brokers, appraisals and banks all very fraudulent people, and so too many people loosing their houses, The government should take action and dont allow this to hapen

Answer 5

If you did not read and understand the papers you signed, I would say that the burden for your situation is upon you and you probably have no basis for a suit. On the other hand, if the situation is financially out of control for you, maybe a lawyer could assist in re-negotiating your terms. I hear a lot of that being done now as a better alternative to running away from the situation. Lenders would rather compromise and lawyers are scary, so maybe there is a way out there. Best of luck.

Answer 6

I AGREE WITH DOOGIE

In your post you said you didn't "notice" what he did.

PLEASE. At settlement, these papers are explained. It's written down. You signed the note that explains the interest rate and its schedule.

You signed a typed copy of your application at settlement.

This information was in front of you!!! Why didn't you read it.

The lender gave you a good faith estimate under federal law. If he didn't then report him.

NO ONE MADE YOU PURCHASE a home that I know you knew you couldn't afford. If you had done ANY homework you must have known that the teaser rate was a low rate. Did you honestly believe that you could get something for free.

Answer 7

I had the same problem with a house i bought. the previous proprietor had completed some attractiveness redesigning, consisting of putting in new kitchen cabinets. below the kitchen, the commencing place replaced into cracked and all of us doing the transforming might have observed it (the plumbing and electric have been run down there). yet, it replaced into in no way disclosed. in accordance to state regulations, that can selection quite from state to state, a vendor ought to divulge all matters commonplace with regard to the valuables by using itemizing the matters on a circulate disclosure assertion (TDS). between the contingencies of the sale is that a customer can lower back out of the deal devoid of penalty (get all their money lower back) if there are matters on the TDS that they did no longer know approximately on the same time as the sale replaced into intending. yet, if a vendor does not contain an argument on the TDS and the sale is going by using, then the customer for this reason discovers the problem, the customer can sue the vendor and the advertising agent for non-disclosure. the quantity of the healthful may be despite the fact that money may be required to restoration the discrepancy and "make the customer total lower back" (like reimbursing criminal expenses). despite the fact that, there is likewise a statute of barriers that varies from state to state. In California (and in maximum different states I researched), it is two years from the date escrow closed (the sale replaced into very final). And, on your case, meaning which you have waited too long to handle this concern, and the vendor and vendor's agent are actually not any greater answerable for the matters. verify with the real assets agent who represented you interior the sale and ask them. in case you probably did no longer have one (shame on you) or can not detect them, touch a real assets lawyer on your state and ask what the statute of barriers is.

Answer 8

Good luck.

Next time, make sure you read all the paperwork and undestand what you are signing. It's advisable to ask for the paperwork in advance to go over it, plus you had a three day right of recision (in california).

Talk with your mortgage company directly, they might be able to help you out.

Answer 9

sueing someone is just a long, expensive and time consuming process. the best route would to treat and start the process and hope your overpaid attorneys can reach an agreement that wont put you out even more money.

Answer 10

Get a lawyer