Q: We bought a property five years ago and used an interest-only loan that had a fixed interest rate for five years. The base rate is 3.25 percent plus the one year Treasury.
Our loan was just sold to another bank. When they contacted us about the new rate, they said the base rate was 5.5 percent. We told them our copy of the loan said 3.25 percent.
They faxed over their copy of the loan and everywhere our note says 3.25 percent, theirs says 5.5 percent.
After looking more we noticed that the signatures are identical on both notes. It is very obvious that the note was altered. We had an attorney send a letter in protest of this and we asked for the rate on our original note. We are getting no response. What do you think of this?
A: I think that someone figured they couldn’t sell your loan for a high enough price with a base interest rate of 3.25 percent and so the paperwork was altered to reflect a higher interest rate – which turned into a higher sales price for your original lender.
This is one form of mortgage fraud, and you should immediately contact your state agency that regulates mortgage lenders in your state and file a complaint. You should also call the attorney general’s office, as I’m sure you are not the only borrowers this has happened to.
I’m glad you have the original paperwork. You’ll need to make copies and provide it to the state banking regulators and the attorney general’s office. You’ll have to get tough with the lender to make them back down and may even have to sue them.
I’m hoping your state regulator or attorney general picks up the ball. But if not, you should contact the Treasury Department and the Fair Trade Commission (ftc.gov) and let them know as well.
Your attorney may also have ideas as to what you can do. You should also look over the other documents from your closing. There are various other documents you signed at your closing that would indicate what the terms of your loan were when you signed the documents.
If you find those other documents and those documents show your base interest rate of 3.25 percent as well, you should ask the bank for copies of those documents. In some cases, you will find that the base rate and your signature will be on the same page. You may also see that one of the documents was altered. If you determine that the bank’s documents were altered, you will bring it to the bank’s attention and proceed from there with your attorney’s help.