Hello. I am sorry you are getting "bounced around" a bit. Allow me to answer your questions. Please note:This is general information for educational purposes only and is not legal advice. No specific course of action is proposed herein, and no attorney-client relationship or privilege is formed by speaking to an expert on this site. By continuing, you confirm that you understand and agree to these terms.
My first question is this legal?
It may be unethical, but it is legal. If someone in your situation had already signed a contract agreeing to work out a loan or something akin to this, then they may have been talking about enforcing this. If there was no contract signed at this time, but they still threatened the $1,600 fee, then they may have been bluffing to scare you. And it worked. It is unethical, but not illegal per se. However if this is the case, a complaint may be filed with the administrative authorities who may slap them on the wrist for their actions. NOTE however, this would not decease one's liability under the contract.
My second question is on the LOI my legal name was not correctly listed on the document (my legal name is R ***** ***** they had it as Chris R Turner)and the amount of the loan was incorrect. I asked for $130,000 and the LOI was written for $120,000.
I am afraid not. Allow me to explain why. As for the name, (a) if it was a minor mistake and obviously both parties understood who the party borrower was, then this is not an issue. And, (b) the loan is enforceable against whoever signs it. So if someone in your situation signed it and received money from it, then one is liable.
As for the loan amount, under something called parol evidence rule, when there is a written agreement and a verbal agreement about the same thing, the written agreement controls. As such, whatever amount is written into the contract which you signed controls the situation. I am sorry. It is presumed that the signor read and agreed to the terms prior to signing.
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