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Can the Broker change our locked in interest rate because he filed paperwork incorrectly?

We locked a 2.5% interest rate and then had our appraisal done. We contacted the Broker a few weeks later as we hadn't heard back from him and they had had the appraisal for a week. Then 2weeks later he called and said he didn't put our property in as a manufactured converted to real property and the best interest rate he can do now is 3%. Legally can he do this as it is not what was initially agreed apon? by stephanielagios103 from San Jose, California. Nov 19th 2020 Reply

Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 2,423 contributions

Based on your explanation, yes. An interest rate is specific to several factors. If the loan was locked based on the property being a traditional Single Family Residence (SFR) home, but it is really a manufactured home, then the lock is not valid and a change would be necessary. You do not have to accept this change, but the lender does not have to proceed with an invalid lock either. If you opt to reject the change, then expect to see a decline letter. A manufactured home is ALWAYS a manufactured home. If the county removes the DMV tags and converts the parcel to an affixed home, the affixture treats the home for legal and tax purposes LIKE a traditional SFR, BUT it is still a MFG home. By the way, an increase of only 0.50% in the rate moving from SFR to MFG tells me that they are trying to mitigate the impact, as I would expect the rate to be at least 0.75% higher. ~ Bert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ At NEXA, we've got you covered. We are licensed in all states except VA and we're pending approval in MA and NY. ~ 480-889-9000.

Nov 20th 2020
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