I’m taking a few days off and thought I’d share an post I wrote a few years ago (April 2008) at Rain City Guide. It’s interesting how much higher the rates were back then. You can read the original post here.
I’ve been communicating with a home owner who thought their loan was locked in at a certain rate only to learn that this is not the case. Here’s their story:
Their existing ARM reset in March. In late February, they informed the LO they wanted to lock at 5.5%, no points, 30 year fixed, and close before April 1 and the LO said it was reasonable and doable. The appraisal was complete in late March with a LTV 79%. The LO did not lock in at that time. The LO presented a GFE 55 days after the application was signed and not the program that was agreed on…the LO admits he dropped the ball but cannot fix it with his bank.
That would depend on the “written lock confirmation.” If that document constitutes a binding contract, then yes the borrower would have a breach of contract claim against the party to the contract for the difference between the promised rate and the actual rate. Even if the document does not constitute a contract, the borrower might still have a negligence claim (i.e. a malpractice claim) against the LO if the LO failed to exercise a reasonable degree of skill and care in attempting to lock in at the promised rate. In either event, the borrower’s recourse would be against the LO (I think — again, I would need to see the “confirmation” to confirm in regards to the breach of contract claim).