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-   -   Is the Bank trying to rip me off? (http://www.diychatroom.com/f39/bank-trying-rip-me-off-24404/)

istari 07-28-2008 04:16 PM

Is the Bank trying to rip me off?
 
I was shopping around for a mortgage, and got good faith estimates from several. This was June.

I decided on one, and paid a $399 application fee.

The mortgage agent sent me a new good faith estimate, and there is a $1200 mortgage broke fee not included in the original good faith estimate.

Is this normal? Should I ask him to waive it?

Thanks!

Ron6519 07-28-2008 07:43 PM

This sounds like one of those fringe mortgage companies who preys on the uninformed and gullible. If your neither, take your business elsewhere.
Ron

bofusmosby 07-29-2008 07:32 AM

The Mortgage business is ripe for rip-offs. Its almost as bad a dealing with a used care salesman. Not all are bad, but you really have to look for the good ones.

jerryh3 07-29-2008 08:42 AM

What state are you in and what is the loan amount?

Yoyizit 07-29-2008 09:03 AM

Quote:

Originally Posted by istari (Post 143822)
I was shopping around for a mortgage, and got good faith estimates from several. This was June.
I decided on one, and paid a $399 application fee.
The mortgage agent sent me a new good faith estimate, and there is a $1200 mortgage broke fee not included in the original good faith estimate.
Is this normal? Should I ask him to waive it?
Thanks!

They're testing you.

I had the same deal with my contractor's insurance, which went up 50% from one year to the next with me never filing a claim.

When I balked, they said "good news, we'll take another look at it."

I send them an e-mail saying "more good news; I will pursue fraud charges" and I sent them an Internet excerpt titled "elements of fraud".

Then their "ombudsman" called me and acted as if he had no idea what I was talking about.
I asked for his e-mail address, and he refused.
I asked that all correspondence between him and me be in writing. He refused, and kept asking me what the problem was. He wanted to know this, not to solve "the problem", but to find out what cards I was holding.
I never got a chance to ask him for sworn statements!

He was very persuasive, and I could feel myself tiring from his constant questioning. I don't usually deal with people like this.


I wrote my state's attorney, my company lowered the premium and I found me another insurance company. Probably in a few years they will pull the same trick.

If your mortgage company is forced to recant they will probably defame you (We're sorry that that poor soul, Mr. Istari, somehow got confused.)

jerryh3 07-29-2008 09:23 AM

Quote:

Originally Posted by Yoyizit (Post 144016)
They're testing you.

I had the same deal with my contractor's insurance, which went up 50% from one year to the next with me never filing a claim.

When I balked, they said "good news, we'll take another look at it."

I send them an e-mail saying "more good news; I will pursue fraud charges" and I sent them an Internet excerpt titled "elements of fraud".

Then their "ombudsman" called me and acted as if he had no idea what I was talking about.
I asked for his e-mail address, and he refused.
I asked that all correspondence between him and me be in writing. He refused, and kept asking me what the problem was. He wanted to know this, not to solve "the problem", but to find out what cards I was holding.
I never got a chance to ask him for sworn statements!

He was very persuasive, and I could feel myself tiring from his constant questioning. I don't usually deal with people like this.


I wrote my state's attorney, my company lowered the premium and I found me another insurance company. Probably in a few years they will pull the same trick.

If your mortgage company is forced to recant they will probably defame you (We're sorry that that poor soul, Mr. Istari, somehow got confused.)

Fraud for what?? As a private company can't they charge what they want to charge. Isn't it your right to compare that price with other companies and then make the choice whether to continue with that company? What was the State's Attorney's response?

Yoyizit 07-29-2008 10:35 AM

Quote:

Originally Posted by jerryh3 (Post 144021)
Fraud for what?? As a private company can't they charge what they want to charge. Isn't it your right to compare that price with other companies and then make the choice whether to continue with that company? What was the State's Attorney's response?



To answer your last question first, MD's state's attorney sent my e-mail to the insurance administrator for Maryland and they sent my first insurance company a letter [cc to me, but I can't find it right now] asking them, in effect, to justify this rate change.
They also asked for stuff, numbers, having to do with the insurance industry, jargon I didn't understand. Business benchmarks, etc.

I'm not a lawyer, but,
if my insurance company had told me years ago that they would do this rate change for no reason apparent to me, and I agreed to it, then there is no deception and I have no case.

Apparently the grounds for legal action is that, if my exposure to risk [and, therefore, their exposure to risk] hasn't changed then there is apparently no valid legal reason for my insurance company to raise my rates.

For instance, I decide I want to go into the business of making explosives; they would be justified in upping my rates over that for a contractor, or deny me coverage all together. Since I have no experience or training in making explosives, they would probably deny me coverage.

I talked to a few insurance agents about this, and some of them may have been honest.
One best guess was that my ins comp got a new CEO, he had something up his behind, and he said
"raise the rates for the following group of people; if they pay, that's great.
If not, they can go to a Very Hot Place presided over by a gentleman with horns and a pitchfolk, and stay there."

The law is supposed to promote the good of the public.
Having a CEO right out of a Dilbert cartoon act capriciously is not in the public interest.

The odds of my actions changing the conduct of my (well-known) first insurance company, or any company belonging to an industry as well-connected as the insurance industry?
Less than 10%, probably more like 1 in 10,000.




[Georgia, 3]

nap 07-29-2008 10:49 AM

Quote:

I'm not a lawyer, but,
if my insurance company had told me years ago that they would do this rate change for no reason apparent to me, and I agreed to it, then there is no deception and I have no case.

but since they failed to tell you that your rates may someday go up you believe you are entitled to have your rates frozen in perpetuity? Come on, use that brain.


Quote:

Apparently the grounds for legal action is that, if my exposure to risk [and, therefore, their exposure to risk] hasn't changed then there is apparently no valid legal reason for my insurance company to raise my rates.
Oh, the fact that the cost of living has gone up, the cost of replacement of anything they insure has increased in price, and many other items of cost to them have increased is not a valid argument for increasing the price of insurance?


Quote:

For instance, I decide I want to go into the business of making explosives; they would be justified in upping my rates over that for a contractor, or deny me coverage all together. Since I have no experience or training in making explosives, they would probably deny me coverage.
but that is not involved, why argue the point?


Quote:

I talked to a few insurance agents about this, and some of them may have been honest.
One best guess was that my ins comp got a new CEO, he had something up his behind, and he said
"raise the rates for the following group of people; if they pay, that's great.
If not, they can go to a Very Hot Place presided over by a gentleman with horns and a pitchfolk, and stay there."

bottom line; there are laws specifically directed to the insurance providers. If they have been broken, then hold the states AG to enforcing those laws. If no laws were broken, this becomes a matter of how that insurance company decided to do business. If you do not want to do business with them, then you have all rights to purchase your insurance elsewhere.

Quote:

The law is supposed to promote the good of the public.
Having a CEO right out of a Dilbert cartoon act capriciously is not in the public interest.

So I guess this means you will never raise the rates you charge for doing business or will never ask for a raise, regardless what the cost of living does, right? to promote the good of the public; I can infer, just as well, that a healthy insurance company that is able to pay claims without delay is in the best interest of the public as well. If an insurance company does not have funds readily available, that could cause a much greater harm than simply raising your rates. So, whose perspective is the correct one?




Quote:

The odds of my actions changing the conduct of my (well-known) first insurance company, or any company belonging to an industry as well-connected as the insurance industry?
Less than 10%, probably more like 1 in 10,000.

then get 9999 more people to agree with you and that would give you a 100% chance of making a change. That is the American way, after all. Numbers provide power.





[Georgia, 3][/quote]

Yoyizit 07-29-2008 01:17 PM

Quote:

Originally Posted by nap (Post 144034)
but since they failed to tell you that your rates may someday go up you believe you are entitled to have your rates frozen in perpetuity? Come on, use that brain.


Oh, the fact that the cost of living has gone up, the cost of replacement of anything they insure has increased in price, and many other items of cost to them have increased is not a valid argument for increasing the price of insurance?

but that is not involved, why argue the point?

bottom line; there are laws specifically directed to the insurance providers. If they have been broken, then hold the states AG to enforcing those laws. If no laws were broken, this becomes a matter of how that insurance company decided to do business. If you do not want to do business with them, then you have all rights to purchase your insurance elsewhere.

So I guess this means you will never raise the rates you charge for doing business or will never ask for a raise, regardless what the cost of living does, right? to promote the good of the public; I can infer, just as well, that a healthy insurance company that is able to pay claims without delay is in the best interest of the public as well. If an insurance company does not have funds readily available, that could cause a much greater harm than simply raising your rates. So, whose perspective is the correct one?




then get 9999 more people to agree with you and that would give you a 100% chance of making a change. That is the American way, after all. Numbers provide power.





[Georgia, 3]

[/quote]

So. . .Mr. Nap. . .what type of insurance do you sell?

Nestor_Kelebay 07-29-2008 05:46 PM

I suspect the "mortgage application fee" is nothing more than a charge they hope you'll pay.

Where I live, the government controls residential rent increases. It costs a landlord $500 to apply for a rent increase. To huge apartment blocks, that's a small tip. To the landlord of a small 6 unit apartment block, it's prohibitively expensive. It's this kind of blatant attempt by the government to prevent small landlords from increasing their rents that leaves a sour taste in my mouth. We expect our own government to be fair with us. When our own government tries to undermine us, who else do we turn to for help? What our government is essentially saying to landlords in Manitoba is: "Well, for every voting landlord, there are 100 voting tenants, so who's side do you think I'm on?"

bofusmosby 07-29-2008 07:08 PM

Now look at what you done did. You had to rattle my cage! OK, I'm going to get on my soap-box for this.........

As far as insurance, IMO, insurance is one of the biggest rip-offs there is. No, not all, but a lot of the biggys. Homeowners insurance. I bought my house back in 99, and my homeowners insurance was about $1,200 a year. Then the hurricanes came through, and the rates were raised. No, I don't mean to a reasonable level, but to an outragious amount. I have had State Farm since 82, and never filed a claim. Might I add, then my insurance last year was up to about $4,000 a year. Also, because I live within 2 miles of the bay, they dropped me. Now I have the insurance of last resort,, Citizens. If I hadn't been dropped, my insurance would have been about $6,000 a year!!! The problem is, when there are many, many decades that go by that the insurance companies have a huge profit, instead of keeping some of that as a reserve, instead, they pay their people an outragious salary, with high bonuses. Then, when something comes along, and they haven't saved any of that money, they want to cover their butts, and stick it to the rest of us. Now this I believe is nothing but plain and simple robbery! Unfortunately, we all have to have the insurance, I just wish they'd kiss me before they @crewed me! I also had car insurance with them as well. When they dropped me, I called the home office, and let them know that since I'm not good enough to be covered by their homeowners insurance, I told them that they weren't good enough to cover my auto insurance, so I dropped them!

I can understand raising their rates, but don't rake us over the coals, or pee on my leg and try to convince me its raining.

OK, I'll get off my soap-box now.

See ya!

Bofus

nap 07-29-2008 10:06 PM

So. . .Mr. Nap. . .what type of insurance do you sell?[/quote]

who said I sell insurance? I merely questioned your position of something being wrong merely because a business increases its rates as time passes even without the individual policy owner making any claims. Business costs are not static. There are always fluctuations that cause changes in pricing.

Nestor_Kelebay 07-30-2008 12:21 AM

Mr. Nap:

I'm not entirely sure that it's the insurance companies that raise their rates.

What I've noticed is that every time I get fed up with paying a very high premium for insurance, a different broker is willing to offer me a lower rate for the same or better coverage. But, every year my insurance goes up again from that lower amount. Kinda like a sawtooth wave function. I've brought this to the attention of my brokers, and they make the same noises you do. They say that costs of rebuilding and replacing keeps going up, and so they have to cover the increasing cost of assuming the risk.

I think it's simply a matter of the insurance broker simply milking his customers more every year. I say that because in one case I told my broker "I don't know your business, but I'm shopping around for a rate I like better." but I never did actually shop around. When my insurance came up for renewal, sure enough, I was offered a lower rate for the same coverage. You explain that one to me.

I pity the people living in New Orleans. They're rebuilding their houses without insurance. If another hurricane hits them, then they lose all the work they put into rebuilding their homes... again. I think if I was one of those people, I'd form a co-op insurance company whereby all of the homeowners pay into a pot which gets dispersed to those that incur damage in another hurricane. That's what happened in Saskatchewan during the 1930's dustbowl. The insurance companies would not cover farmers against loss of their crops, so they formed their own insurance companies. And, those insurance companies are now amalgamated as one insurance company in Canada under the name "The Co-operators Insurance Company Ltd." It's one of the biggest insurance companies in the country.

There's no reason the people of New Orleans couldn't do the same thing. An insurance co-op just for the people of New Orleans could work. After all, other insurance companies did a profitable business there before Katrina.

47_47 07-30-2008 07:07 AM

Question Nestor, Do you shop the insurance carriers directly (agent) or do you use an insurance broker? My company uses a broker and he shops the major carriers. The advantage is he'll come in once a year discuss our needs (in English) and he shops for the best deal. He'll then recommend one or two, based on cost and coverage.

In the last 5 years, he has saved my company approx. 6000.00 after his fees. I am not saying my premiums went down the 6000.00 over the 5 years. In fact I'm paying 3500.00 more per year than in 2003. Even if I broke even, the savings in my time and effort are worth more than that.

Yoyizit 07-30-2008 07:49 AM

Quote:

Originally Posted by nap (Post 144225)
So. . .Mr. Nap. . .what type of insurance do you sell?

who said I sell insurance? [/quote]

I was making a joke :yes:

rather than go through the effort of trying to refute your [straw man?] argument. . .


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