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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Legal
Satisfied Customers: 41221
Experience:  Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
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Is it illegal for a lender to misrepresent information other

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Is it illegal for a lender to misrepresent information other than costs?
I was refinancing my home, and currently, my mother and father are on the title to the home. I was told that they did not need to be present at closing. When I met with the notary to close, the notary brought this to my attention. I informed the notary that my parents are over seas, out of the US, are not near a US embassy, and will not return for several months. I told the notary that I had received an exemption/"override" and that my parents' presence was not required at closing, and that they may provide their signature at a later date. I called up the broker and they verified this with the notary, who then proceeded with the closing. Two days later I received an email from the broker congratulating me on closing. Two days after receiving the email I received a telephone call from the broker's dispersion department informing me that the loan could not proceed without my parents' signatures. Since securing my loan with the broker the interest rates have gone up, and I missed out on this loan. Is this grounds for legal action?
Thank you for your question. Please permit me to assist you with your concerns.

The Lender told you they didn't have to be on title, or that they didn't have to be present?

Good grief, I reviewed your situation. Do you have all those emails in place pertaining to this 'override'?
Customer: replied 4 years ago.
The loan officer indicated that, "while required on the loan documents, their presence was not required at closing". I was told that my parents could provide their signatures at a later time, upon their return. Unfortunately, the above took place during a phone conversation, although the notary who met with me at closing also received the same information, and said, "well I've never heard of this before". I do have other emails and documentation throughout my loan process.

John,

I have never heard of this myself and I have conducted a few closings and refinancing claims in my time. All parties have to be present at the closing who are signing the mortgage and who are on title. Otherwise a closing cannot take place, and something your lender should have known. What happened here is not 'illegal' per se, but it is actionable. Since they failed to properly prepare you for closing AND assured you that their instructions were fine, that makes them liable for your injuries and losses. As a consequence you can seek 'specific performance' from them, meaning that you can demand that they underwrite a loan to you under the exact conditions that they initially promised. If they cannot, sue them for the difference you will pay based on the new rate. This is a good claim and one an attorney should be able to assist you with directly.

Good luck.

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