Aurora Loan Services ripoff-greed non-responsive for their benefit fraudulent ripoff business Scottsbluff Nebraska
in the fall of 2001, when interest rates were dropping to rock bottom, Aurora pumped my interest up to 10.75% and chuckled that they would be able to go to 14%. I got caught in an economic down turn but was able to side step foreclosue by getting a bridge loan. Yet when it came time to get a refinance, they tacked on a $21,000 prepayment penalty!
My new lender did not see that one coming so I investigated. It turns out that they had a loan that could do that. BUT ONLY if my originating loan was less than 50% of my gross pay (plus other normal costs)at the time of consumption I had been out of a full time job and was therefore not earning any fixed, defined income. Ameriquest (another dirtbag) was the originating and they fully knew that I was between jobs.
[Code of Federal Regulations]
[Title 12, Volume 3, Parts 220 to 299]
[Revised as of January 1, 2000]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR226.32]
[Page 235-237]
TITLE 12--BANKS AND BANKING
CHAPTER II--FEDERAL RESERVE SYSTEM
PART 226--TRUTH IN LENDING (REGULATION Z)
7) Prepayment penalty exception. A mortgage transaction subject to this section may provide for a prepayment penalty otherwise permitted by law (including a refund calculated according to the rule of 78s) if:
iii) At consummation, the consumer's total monthly debts (including amounts owed under the mortgage) do not exceed 50 percent of the consumer's monthly gross income, as verified by the consumer's signed financial statement, a credit report, and payment records for employment
income.
ANYHOW I submitted this to them in February 2003 to ask for payoff without the prepayment penalty. They have strung this illegal action out since July of 2002. Still only get "we're looking into it".
Does anyone wanna say class action?
Rod
richmond, California
U.S.A.
1 Updates & Rebuttals
Ura
Scottsbluff,Nebraska,
U.S.A.
Maybe reading your loan documents at closing will help prevent these types of situations
#2Consumer Comment
Fri, August 01, 2003
A loan or mortgage company cannot arbitrarily raise your interest rate because they want to. Your Note would have a specified clause or rider called an Adjustable Rate Note. Under this clause there are caps as to how much a lender can raise or lower your payment at the specified change date outlined again in your original note. Just because prime interest rates are lowering does not mean your adjustable rate mortgage will lower also. A specified index rate is added to a margin to get your new interest rate at your scheduled change date. If your index rate is high it could cause your new interest rate to raise.
Also, a prepayment penalty is charged in accordance with your original note. It is never based on your income but rather it is enforce for the certain amount of years outlined in your original note using a calculation also outlined accordingly.
Reading your original paperwork before you sign will help prevent you encountering these provisions before you want to refinance.