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E*Trade mortgage horror story

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#1 markber


    1 billion bucks

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Posted 17 October 2005 - 07:37 PM

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Below is a story posted by ZetaTag on FW:

I signed a contract on a home last month and shopped around for mortgage rates. I found eTrade to have on of the better rates at the time, and so pursued a mortgage with them, locking in the rate when it was rather low. I proceed to provide all the documents they ask for, and sit back and wait. Some time goes by, and I am asked yet again for further documentation. I provided the documents again, thinking it odd that I'd be asked to fax the same ones. I get a letter (finally) confirming my rate lock, and saying the mortgage is approved, and think good, new house here I come!

Now in order to get all this, I was forced to pay a $600 'rate lock' fee, which I was assured I would get refunded if the loan did not go through.

Time goes on and I am asked for documents yet again, including three separate letters from my employer confirming my occupation.

Well now behind the scenes, there seems to be a decision made that I was locked in with a rate that was too low (certainly seemed too good to be true) as I soon notice that they never call me or return my calls. My title company has since provided me with documentation as well that they effectively ignored them, refusing to assist in the title work. Someone decided this loan shouldn't go through.

We come to the day before the house is supposed to close, with me frantic as I am being refused contact with my loan officers for the past week, never getting through to them on the phone, and never having my calls returned, until 30 minutes until etrade closes that day I get a call, in which I am told that eTrade wants yet another proof of employment provided or they will not close. I must overnight it. Well, I go crazy, beg my boss to help and spent a good amount overnighting the silly documents. Closing days comes and goes with my title company calling to ask why my lender is ignoring their request for information.

I am furious, and call eTrade several dozen times until finally am answered via email that my loan is being denied unless I can provide proof of employment.

My rate lock ends, and I get an email informing me that my loan is denied despite my approval letter, due to my refusal to provide full documentation regarding employment. I have provided all the documentation I possibly can.

Now this is ridiculous, they have four separate documents, all my tax information, and a long work history proving my current employment.

So I'm bummed, mad, and worried about my purchase contract, but after praying for a miracle, manage to get a different last second lender and looks like I can still get my home, albeit at a much higher rate.

I email them asking for a refund of my $600 lock in, and am told that I will not receive a refund. I call the supervisor as instructed, and am immediately yelled at that I can not get any refund, very rudely. I proceed to plead my case, and get yelled at again that there will be no refund.

Alright, short of marching down there with a baseball bat, what are my viable options for:
1) getting my money back
2) reporting them to agencies that regulate this sort of thing
3) protecting others from this

I will be issuing a dispute with my credit card company, all other suggestions are welcome. Will update to let you all know what one angry fat walleter can do.

Source: fatwallet.com/t/52/531378/