Refinance: Is it legal for the previous mortgage broker to charge penalty to reimburse the original lender?
alec b asked:
…even if the original loan had no prepayment penalty?
…even if the original loan had no prepayment penalty?
Please refer to the following form. Is it even legal in CA?
In the event I / we refinance the loan through anyone, other than “XXX Lender”, within twelve (12) months of the funding date, I / we agree to reimburse “XXX lender” for any, and all, penalties against it by the original Lender, or anyone to whom the loan may have been assigned.
“BY SIGNING BELOW, I / WE HAVE READ, UNDERSTAND, AND CONSENT TO SUCH REIMBURSEMENT SHOULD THE EVENTS DESCRIBED ABOVE OCCUR.”
MARQUIS
November 1st, 2009 at 8:48 am
SEBASTIAN
As long as you dont refinance within twelve months you should be fine. If you signed this document, you are stuck with it because it clearly states that if *** lender is charged then you have to reimburse him and only in that case, so if you dont have a prepayment penalty you should not have to pay anything. Even then try not to refinance for 12 months to be on the safe side.
Your welcome.
November 4th, 2009 at 7:29 am
LINWOOD
Sounds like a legitimate contract to me. Lenders can and do charge the originating Mortgage Broker penalties if their clients refinance inside a specified period of time. Twelve months seems kind of long (one of my lenders penalizes me inside three months). The Mortgage Broker is using this document to attempt to pass those penalties on to you for your rapid refinance.
November 5th, 2009 at 4:54 pm
EMANUEL
If you have no prepayment penalty. Than dont sign the document. If the mortgage broker wants your buisness than he/she will still take your buisness. Basically get a new mortgage broker or go straight to the Lender/Bank. Contracts are only good if signed.