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socrateaser
socrateaser, Lawyer
Category: Real Estate Law
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Experience:  Attorney and Real Estate broker -- Retired (mostly)
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I have a VA mortgage. Amerigroup Mortgage Corp sent me a flyer

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I have a VA mortgage. Amerigroup Mortgage Corp sent me a flyer saying they could refinance my VA loan at 3.5% for the next four years. After that, my mortgage would be subject to a percentage to the changes in the FED rates. In other words, it would be an adjustable rate with certain limits. I presently have a 6% VA loan with Chase. The salesman came to my home rather than having me come to him. He wanted $1667 in earnest money to secure the deal before he left. It kind of didn't smell right, but sounded like a good deal if it isn't a scam. How about it. Do I worry that Amerigroup is trying to pull one over on me? They are registered and VA approved, so is this good or not? It would stand to reason that I would refinance my VA loan through the present mortgage, Chase; however, they no longer refinance mobile homes. In fact, few do these days. If I close with AMC (a sub of Mortgage Investors Corp) is there a catch I should worry about? All internet chat out there in the negative criticize the AMC loan officers of neglecting to mention the VA loans are not assumable or they weren't told the rates are adjustable. My officer was up front with all that. Please give me some pros and cons of proceeding with this refinance.
Submitted: 7 years ago.
Category: Real Estate Law
Expert:  socrateaser replied 7 years ago.

Under 24 C.F.R. Sec. 3500.7(a)(4), a lender may not charge any fees in connection with providing a Good Faith Estimate, as required by the Real Estate Settlement Procedures Act. The collection of the earnest money is likely an attempt to circumvent federal law.

 

Most reputable lenders that I have dealt with only charge for the real estate appraisal. Everything else is taken out of the loan proceeds at close of escrow.

 

Hope this helps.

 

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Customer: replied 7 years ago.
The earnest money is supposed to be returned at closing rather than be included in the refinance closing costs, which has been the case in other closings I have made. I am not so worried about that as to the question that I might be getting into a loan scam that I may not like after the adjustable rate takes over after three years. Complaints on the internet about AMC are mostly geared that folks felt they were lied to by their loan officer about these being fixed rates rather than adjustable. My agent appeared to be up front with everything. I guess the big question I am having, is AMC (sub of MIC) legit? Are there any mortgage cops out there giving warnings about getting into VA adjustable rates with this company? And if so, what are they saying?
Expert:  socrateaser replied 7 years ago.

The only thing I know about AMC is that they appear to settled several Federal Trade Commission complaints against them concerning overreaching in their sales tactics (e.g., violation of the federal "do-not-call" registry regluations).

 

I still maintain that charging an upfront fee is illegal, even if you're entitled to get it back on closing. But, that's up to you.

socrateaser and 2 other Real Estate Law Specialists are ready to help you
Customer: replied 7 years ago.
If I get screwed somewhere in this deal I'll let you know. Thanks
Expert:  socrateaser replied 7 years ago.

I appreciate that effort. It may be useful to future customers with similar concerns.

 

Good luck.