Optimum First Mortgage of Fountain Valley was the first to call me after I filled out an on-line refi query. In fact, they called me within two minutes after I hit the enter key. The very first words out of the broker's (Robert) mouth were about how bad the competition (Quicken Loans) was. I should have been more concerned about how low Optimum First's level of competency was.
Bad-mouthing their competition should have been a clue to me that they were not very professional. To make a very long story as short as possible, Robert either misquoted, lied, or did NOT know that a 5/1 ARM could increase by 5% after the first five years. In fact, did not know that it could increase 5% in the sixth year. I asked Robert several times the max increase per year and he repeatedly said 2% per year until it increases a max of 5% above the starting rate.
I looked it up in the disclosure statement, which said it could increase 5% in the sixth year, regardless of what the Libor or rates in general do. How could he not know that? I asked him again, this time in an email; again he said 2%. This time it was in writing.
They also failed to disclose, up front, several requirements of the lender (Provident--another story) they were working with. Like, oh by the way, you need to write us a letter telling us what you are going to do with the cash out. No problem. After I wrote the letter they came back and said I neet to get estimates for the upgrades/repairs I had planned to use the money for.
Robert and Optimum First also mis-quoted the appraisal fee, by about 50%, low, of course. They promised to pay this back to me but I'm still waiting for the check.
Another think, I paid for the appraisal out of pocket but the lender still added it to the loan costs to determine the payment. I'll have to talk to HUD about that. Seems illegal that I'm paying a higher payment because of something I paid out of pocket.
Now, dontcha think that a broker who has been working with a specific lender would know the lender's requirements and pass them on to the client early in the process in order to expedite the loan?
Robert and his supervisor tried to convince me to get the estimates, get the loan, and then just use the money for whatever I wanted to do with it.
Talk about ethics...
I decided that Robert was incompetent, Optimum First was incompetent, and cancelled the loan. It wasn't that good of a deal and they weren't lowering my payments very much anyway.
Beware of Optimum First and especially incompetent loan brokers.
Review about: Real Estate Refinance Loan.