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refinancing penalties?

post #1 of 19
Thread Starter 
Is anyone familiar with mortgage refinancing laws? We re-financed our mortage back in December and also had some of our debt rolled into it. When we signed the papers, we were NOT told about any penalties involved, except there may be a pre-payment penalty if we were to pay off the house in full within so many years.
Anyways, in February, I called our mortgage company to inquire about streamlinging and the CSR told me that our we;d have to pay $6000 if we wanted to re-finance He told us the lender tacked that on. When I emailed the girl at the lender company, she said that she did tell us that -- well, I know she did not or I would have remembered something that important. So now we are basically screwed. How do you find out if what they did is legit? We have a rate of 8.65% and as you know, interest rates are WAY lower than that.
post #2 of 19
They don't have to "tell" you. Its on the papers you signed, and before you sign those papers you are supposed to read them thouroughly.
post #3 of 19
Thread Starter 
Originally posted by dtolle
They don't have to "tell" you. Its on the papers you signed, and before you sign those papers you are supposed to read them thouroughly.
Well, we had a notary & also read the papers thoroughly and I can tell you that we did read them thoroughly... Had I had seen that or had been told that, I can understand that, but there IS NOTHING STATING that.
post #4 of 19
I don't think they can penalize you if its not in any of the papers you signed. Do you have copies? If you do, go over them with a fine toothed comb...you may find something in there that you missed earlier.
post #5 of 19
Thread Starter 
I've gone thru them 3 different times. The only thing that I did find was a statement saying if you payoff early, then there is a penalty, but nothing to the extent of refinancing.... This is the lender doing this, not our mortgage company... Arent lenders and the mortgage company 2 different things, too?
How can the lender (Oak St.) charge us a penalty when we have GMAC as a mortgage company?

This whole thing just frustrates me and is p.o. me off .....
post #6 of 19
Have you thought about going through a different lender? I have an FHA mortgage. When I did a streamline refinance last year, my only out of pocket was $350 for an appraisal.
post #7 of 19
As I am a notary, I know that Notarys do not always read the documents they are notarizing. They are simply authenticating signatures.
post #8 of 19

If there is an early penalty payoff, and you refinance your home again, in essence you are paying off that loan to start a new loan. That means you will have to pay the early penalty payoff.

The bank will close out the loan you have now, and pay it off. Then your new loan is completely separate. So, it sounds to me like you signed the paper that said that, and refinancing is all inclusive.
post #9 of 19
By the way, when you streamline a mortgage, its still a 'new loan'. You will have a new loan number, etc. Streamlining simply means you don't have to complete all the necessary paperwork for a new mortgage, they just use what they already have on you. But its still a NEW loan.
post #10 of 19
Thread Starter 
I dont know .... $6000 is a lot and a lot of people I have talked to say that is not right. Usually its $3000.
I'll just see what other bankers have to say about it.
post #11 of 19
I have an apartment, so I don't know anything about that, but good luck with it!!
post #12 of 19
Tigger, it really doesn't matter what the market standard is. The only thing that matters is what is in the paperwork you signed. If they put a clause in there that says you have to pay a $6000 payoff penalty, then that's what you have to pay. There is nothing you can say about it after you sign the papers.
post #13 of 19
Thread Starter 

What else do I have to type to get someone to understand that. I really must have stupid written on my forehead if no one is getting it.
post #14 of 19
What DOES it say about a pre-payment penalty?

If there is absolutely nothing in there about a penalty, I would talk to a lawyer.
post #15 of 19
If that $6000 is NOT spelled out, in your contract, the lender can't dun you for it. I'm not up on real estate law but, I handle auto loan contracts, all day long. A contract is a contract and, if it ain't in the contract - it ain't.
post #16 of 19
Oh shoot! I knew I should have saved that article.
Within the past few months there was an article in the Seattle Times specifically on the ways they scam you on refinancing and the laws.
I will try to find it for you, but I do know there are laws, and what they are pulling with you sounds like a load of crap!!
post #17 of 19
Check these out -

If the link doesn't work "Make sure your refinance has title-rate discount" Seattle Times http://www.seattletimes.com , Northwest Life Section, April 13, 2003

See links under general and refinancing

Free legal services - you can call to ask them to help you understand

Ask if this is covered under bill 1290, a consumer protection act against predatory lending. I don't really understand the bill, but I assume they would.
post #18 of 19
Tigger I don't know what state you are in BUT in NJ it is against the law to charge a penalty if you decide to pay off the loan early. Might want to check that out!
post #19 of 19
In AZ, they can charge an early payoff penalty. Bill and I have that clause in our mortgage.

I checked with Bill (he's more up on this) and your former lender may be the one who's charging the penalty, since you paid off the old mortgage early.
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