I live in Chandler Arizona and in the early summer of 2006 I was looking to tap into some equity in my home of 15 years specifically to use for investing in my retirement in about 15 years.
A local mortgage broker convinced me that If I refinanced my mortgage using his service, I could take out at least $50,000 and invest it for my retirement with them at a guaranteed earnings of 12%, so I proceeded to fill out the Broker's website short application and hit the submit button.
A couple of days later I got a regular mortgage application in the mail to refinance my 1st and 2nd mortgages and if I remember correctly, most of the application was already typed out so I proceeded to verify what I had put on the website application versus the full application sent to me before I mailed it to World Savings (as the instructions said to do so) and noticed that the Broker had modified my monthly income and typed in $4500 per month for salary instead of the $3000 per month that I had put in the web form. I thought it was a simple mistake. I proceeded to scratch it out and put down $3000 as my real monthly income.
I went ahead and mailed it to World Savings (now Wachovia/Wells Fargo or whoever owns it now) via DHL and a day or two later I told the broker about the error and he basically said the loan company (World Savings) wouldn't even look at the salary figures (no income verification needed) or something to that matter. He also said I shouldn't have mailed the application to World Saving because they already had the application. Apparently, he had sent it to the loan company unbenounced to me. As you can imagine, I was perplexed to say the least. I had never done a application process in this way so I thought it was just a new way of it being done.
Well as you can guess by now, World Savings put me into a "Pick A Payment" loan and since I didn't qualify for at least $50,000 in cash out money, I couldn't use the Broker's service that I signed up for in the first place.
Would them typing the wrong salary on the application constitute predatory lending and if it does, how can I get the heck out of this loan and redo my loan so that I can stay in my home?
I'm pretty sure I am still above water on my loan . I owe $168,000 and it is worth about $180,000. I've been making the minimum payment every month and on time. If I just do a refinance at the current balance there is no way I can afford the payment. I currently earn $3,300 per month and there is no overtime whatsoever at work at this time and in the distant future.
World Savings should have a record somewhere of the loan that I sent them via DHL with the mods that I made to the application under salary with my initials.
Original 1st and second mortgages were a combined $115,000 before I refinanced. The new loan was $157,000 (about $36,000 cash back to invest and home remodel)
I honestly don't think any legitimate mortgage company would have given me a loan with my income at that time. I think I would have just gotten refinanced with no cash back and the loan would have been about $120,000.
Does anyone know what Wachovia's PEG Program consist of?
FYI: Back in January I did a loan mod with Wachovia to reduce the interest rate from 8.1 to 7.35 % (charged me $350) but it is still a Pick a Payment loan with the same terms.
Selling the house is not a viable option because homes are not selling well around the Phoenix area.