95% of our clients have found that they are owed a cash rebate from their lender! However, no one told them about this cash rebate. Obviously the lenders are not very active in advertising this rebate, especially during this time of economic turmoil, because these lenders are using the rebate money to offset bad debts on other people’s mortgages. Regardless of the situation that the lenders are in, you may be owed a cash rebate on your mortgage.

In the effort to create loans there has been a lot of misleading information regarding critical aspects of most home loans. As a result most borrowers were charged and have overpaid various fees (and in some cases those fees are continually being paid on a monthly basis). The federal Truth in Lending act requires the lender to honestly disclose all fees to the borrower before the loan is dispersed. Any errors (whether accidental or intentional) must be repaid to the borrower immediately.

In order to qualify for this rebate there are several things that must happen. First, one must catch the error(s) within the first 3 years. Second, there must be an error with the lending disclosures and/or loan fees paid. Third, one must still own the home. Fourth, the appropriate paperwork showing the error(s) must be submitted directly to the current loan servicer(whoever currently holds the mortgage).

Some of our clients have chosen to forgo their cash rebate in exchange for a change in loan terms through a loan modification. Some terms that we’ve seen negotiated include a direct principle reduction in the loan amount, a reduction in interest rate, no mortgage payments (up to 6 months), a change in loan terms allowing for loan assumption (good for when you decide to sell), removing the “Due on Sale” clause (also good when you decide to sell), and lender concession (such as free home insurance or lender subsidized property taxes). The lender is usually quite willing to negotiate special terms because they would rather keep a good customer than pay a large rebate for their errors.

For more information please contact us by email at Khayyam@KhayyamJones.com or by phone at (801) 787-7797.