LSI Mortgage Plus Mortgage Refinance Bait and Switch Dulith, Georgia
LSI Mortgage and Chris Piatchek pulled the Refinance bait and switch on me pure and simple. They promised me (in writing) a 30-year fixed rate of 3.625% and then at the last second (when it was too late for me to bail out), they changed the rate to 4.5%, not because interest rates went up, but for a completely bogus reason.
When I saw the higher rate on the Final Hud statement, I called Chris Piatchek and asked him about it. He assured me once again that I was locked at 3.625% and that the 4.5% on the paperwork must be a mistake. However, shortly before closing Chris changed his tune and said he was having trouble getting any banks to take the loan. I knew that there was no possible reason that the banks should be balking at the loan. My credit rating is beyond excellent and the loan was for $250,000 LESS than the appraised value of the house! So I knew the appraisal being too low could not be an excuse to raise the rate. But WAIT! LSI managed to come up with a reason why they could not give me the agreed-upon rate: Not enough comparable sales in my neighborhood in the last 6 months, so the appraisal wassuspect. HA! I live in a subdivision that has 1100 (yes, count em 1100!) houses all pretty similar. So that is a completely bogus excuse to raise the rate almost a whole percent. And ESPECIALLY when the appraised value was almost $600,000 and the value of the loan was under $350,000!
And if you have read anything about LSI, you know the ending to this story: All the other banks (BOA, etc.) turned down this risky (HA!) loan and good old Flagstar bank was the only one that would take the loan, but of course at 4.5%, not 3.625%. Because it was too late for me to make other arrangements, I had to go ahead and refinance at 4.5%. Chris Piatchek gave me a rebate of sorts by covering the difference in interest payments between 4.5% and 3.625% for the first FOUR months (until I would hypothetically be able to refinance again). But that hardly makes up for all the expense of a second refinance and for the huge difference in mortgage payments after the four months is up.
Six months later, I was able to refinance the same property with a real bank (not a mortgage broker like LSI) and had no problems at all and got a rate of 3.375%. So, you can do like I did refinance with LSI and then have to do it over 6 months later and pay all the closing costs twice. Or you can skip the LSI fiasco and go directly to a reputable bank or mortgage broker.
3 Updates & Rebuttals
ErnieG
Response to "Common Sense"
#4Author of original report
Tue, June 04, 2013
The "Common Sense" reponse to my complaint has grammer, spelling, and content that seems strangely familiar - like the e-mails Chris Piatchek sent me. So, Chris, you are right - I didn't use a lot of common sense. I should have searched the internet first and would have found numerous complaints about LSI Bait and Switch. I have refinanced many times before and the other people I worked with were honest and led me through the process of locking in the rate. You never mentioned locking or sent me any documents that mentioned whether the rate was locked. When I asked you about it, you lied and said the rate was locked in. Was I naive? Yes. Did you force me to refinance? No - you are correct about that. It is my own fault for trusting a dishonest firm and then getting so far into the process that I had no choice but to proceed or I would lose the house.
Chris, as long as you want to keep the conversation going, I can do this all day, so let's talk about a few other things you did, like:
Filling out the Loan Application for me instead of letting me do it myself, and butchering it so badly that it delayed things with the banks. For example, instead of asking me for my work address, you took it from the W-2s, which was incorrect. You also got a number of other things wrong, and never allowed me to review it. Frankly, a 5th grader could have done higher quality work.
Although the early documents you sent me noted a 3.625% rate, when I finally saw a URL that said 4.5% just before closing, you said the 4.5% was a mistake and you lied and said I was locked in at 3.625%.
Please do me a favor and respond again, so we can continue this conversation. I have more.
MortgageGuy
Dist of Columbia,A Few Thoughts
#4Consumer Comment
Mon, June 03, 2013
I am a former Mortgage Broker...
“My credit rating is beyond excellent” – Awesome Statement... proof?
“And ESPECIALLY when the appraised value was almost $600,000 and the value of the loan was under $350,000!” --You have to have home sales in order to generate a reasonable appraised value. If they’re not selling, they’re not priced reasonably.
commen sense
osage beach,Missouri,
United States of America
common sense
#4Consumer Comment
Wed, October 10, 2012
Well its really common sense you have lacked on your part in closing the loan. you have a set of disclousers that are sent to you ahead of time for you to review. in those forms it states wheather the rate is locked or not locked in. those forms are sent to you right when the approval docs are sent out so you have known that the rate/program could change. i guess it took you around 2 months for closing to take place so that whole time you knew the program could change so not sure why you are acting surprised. your rate was never locked in so you where subject to change pending an appraisal. the appraisal came in and you where giving a counter offer is what it clearly stats. you elected to move forward with that higher rate signed the paperwork and closed the loan. after you signed the paperwork you had 3 days to still recnind on the loan and you didn't. nobody is at fault here but yourself and market conditions. not chris or LSI. he didn't physically force you to sign paper work. you eleceted to do that on your own becuase it was a good deal. now that you got a better deal cause rates went down and market conditions changed you think you got hosed. i have been in the industry for 17 years and work at a different company and think your post is way out in left field and doesn't make any sense what so ever.