First Franklin First Franklin Adjustable Rate Loans and Class Action Pittsburgh Pennsylvania
I purchased a home in 2004 and it was financed with First Franklin Bank. During the closing of the house, I tried to read as much as possible all the forms me and my wife had to sign. I didn't see anything disclosed about the rate going up 3 percent. This was not explained by the mortgage broker who sold us the loan. This information should have been explained more clearly, and now after 3 years we get a letter saying our rate is going up 3 percent. We were quite shocked that it could go up that much.
I have been told that mortgage brokers get more commission to sell adjustable rate loans, than selling fixed loans. This would explain why so many people have been sold these particular loans. The problem is that they aren't explained in detail and we were told that we could always re-finance very easily, which is not the case now with the credit crisis going on today.
I feel like we were misled and not given accurate disclosure of the loan in detail, so we could make an intelligent decision. I think that this is a form of fraud, since we really didn't understand what type of loan we had and the specific terms of the loan.
While I was signing the loan documents at the closing attorney's office, I was going slow and trying to read the paperwork. The para-legal laughed and said that I should just sign everything, because I would have to pay it anyway. Even though you sign the forms, if you don't understand them completely then it should not be binding. That is why it is so important for the company to properly and clearly disclose all terms of a loan and make sure the people obtaining the loan understand how their loan operates and the risk involved.
Now we are having trouble making the payments and the bank is doing nothing to help us. We have called and tried to make payment arrangements and they just tell us to make the payment or else they will ruin our credit.
Christian
Fort Mill, South Carolina
U.S.A.
2 Updates & Rebuttals
Micjam
Street,North Carolina,
U.S.A.
Pending
#3Consumer Suggestion
Mon, January 26, 2009
There is a group now getting together for a substantial class action suit regarding this company. I will be posting the information once we are allowed to be more specific. For now, try and get all of your information organized and copied. Make sure you keep a log (or create one) that shows dates, times, and other information. Specially if you can remember a date and time when you talked on the phone with an employee from First Franklin. Be patient...
Jim
Anaheim,California,
U.S.A.
Adjustable Rate Loan
#3Consumer Comment
Tue, December 11, 2007
I guess a couple of things:
1. Did you believe you were getting an Adjustable Rate Mortgage? Did you believe you were getting a Fixed Mortgage?
2. What questions did you ask beforehand?
3. Most ARM's don't increase 3% in one year. They increase in 1% increments generally until the mortgage hits its maximum, which could be 8%-10%
Often, these loans are set for people whose wages will increase within a certain number of years, so their earnings increase will match the mortgage increase. I don't know how much the mortgage increase is for you, but I suspect it might be maybe $500 additional per month or more? What the broker told you 3 years ago was accurate back then and assumed the market would continue as it has for the last 10-20 years. I mean you're in a rough spot now and refinancing is tough not simply because you may not qualify on the income side, but also on the equity side of the mortgage since housing prices are also tumbling.
It's also important to note in your case that it isn't just the mortgage company that shares blame in your situation - your Real Estate agent/broker had a hand in this by assuring you that you could qualify for the house you now live in. Your RE person gets a higher commission by putting you in a higher value house and works with the bank to make certain you qualify. There are lots of people to assign fault to in this situation. Best of luck to you.