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September 22, 2009
Bad Mortgage Lending Practices?
We have a mortgage with Quorum Federal Credit Union (www.quorumfcu.org) and would like to refinance with a different lender who is offering better rates ... but when we requested that the loan be assigned to the new lender in order to reduce our closing costs, Quorum's attorney has written to us stating, "While Quorum certainly understands your desire to have this mortgage assigned to a new lender, Quorum does not give an assignment in lieu of a satisfaction when a loan is paid off. I have looked at this issue before and there is no legal requirement for a lender to issue an assignment in lieu of a satisfaction."
Is this a reasonable or unreasonable business practice? Is this good or bad customer relations? Feedback please!
Comments
typical.
Posted by: Petebklyn at September 22, 2009 2:44 PM
Yeah, I ended up refinancing with my same lender to avoid same fees/taxes. From their point of view they want to create incentives for you to stay with them. Letter sounds polite at least!
Posted by: Putnamdenizen at September 22, 2009 3:50 PM
That sucks. HSBC is also one of those nasty banks that don't assign mortgages forcing you to refi with them or pay all that mortgage tax again. It goes against the free market as they don't have to compete and your are subject to their terms.
I did an interview with a reporter from bloomberg news a couple months back about this with HSBC but I guess it never was published because I have yet to see it in print.
Posted by: Adam Dahill at September 22, 2009 5:50 PM
Your mortgage does not have early repayment fee. So you are free to pay off principal next month and tell them to shut up.
I am missing something?
Posted by: bobjohn at September 22, 2009 10:05 PM
Bobjohn - The OP is attempting to avoid the mortgage tax on the refi since this is not actually new money. In order to do this the original bank has to agree to assign the mortgage to the refinancing bank. If they do not allow him to do this, he has to take out a new mortgage and use the proceeds to pay off the old one as you are suggesting - but mortgage tax will be charged in the process.
Posted by: newsouthsloper at September 23, 2009 8:23 AM
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