21.2.06
Watch out for bad-loan signals
Johnny Bell had a new deck and other home improvements in mind when he refinanced his home in Oxford, Miss., last summer. Make that almost refinanced. Bell spotted attractive terms on a television ad, contacted the lender and locked in a cash-out refi at 5.125 percent with $350 upfront as a processing fee toward a 45-day closing. Then trouble began. First, the company delayed the closing, saying it was behind on the paperwork. Then it asked for proof of reserve funds and Bell complied. After 90 days, the company informed Bell that his "locked" rate had gone up to 6.2 percent. "I got angry," Bell recalls. "I told them I was definitely not paying more interest. They started making excuses for why it had taken so long, putting the blame on Fannie Mae for requiring the reserves. But the interest rate didn't have anything to do with the reserves." After two more months of futile telephone calls, Bell walked away from the deal, received his $350 back and built his deck out of pocket. "It was bait and switch," he said. "It took me five months to not refinance." articels from : www.bankrate.com |
