Mortgage question is this unethical?

[troutman]

A special hello to hospital patients and shut-ins, the pensioners, the blind, all the people who don't get out to games but enjoy the hockey broadcasts... don't talk about potentially litigious matters in a public forum.

[GP_Matt]

They entered into work with the broker in good faith though and knew everything that they were dealing with going in. The broker bent over backwards to help them get approved. Presumably his bank wouldn't qualify him to carry two mortgages and he needed the second to buy his new house.
The broker did the best that he could given the conditions that you laid out for him. Now that the conditions have changed you have found a better option. The least you can do is go talk to him and lay your cards on the table. He may still have options for you. I wouldn't pay the $8000 penalty, but you could promise to come back to him to in two years when it is up for renewal.

[bizaro86]

Originally Posted by ken0042

My point was really the same thing you said later on in your post; that $8K penalty doesn't nessesarily mean the person has a bad mortgage or high interest rate.

For sure. Basically anyone who got the best available rate 3 years ago and took a fixed mortgage has a large penalty.

[bizaro86]

Originally Posted by GP_Matt

I wouldn't pay the $8000 penalty, but you could promise to come back to him to in two years when it is up for renewal.

I think an honest apology, a promise to come back in 2 years for renewal, and a few hundred dollars in gift cards would be appropriate.

You wouldn't be the first person to do that to him if he's been a mortgage broker for any length of time, but I bet you'd be the first to try to make it up to the guy.

[gildo]

So I am not legally obliged to stay with him?

[Deegee]

Nope.

He wouldn't think twice at your renewal to place you with a different lender (even if he knew the old lender would rate match) just so he could get his basis points again.

[flamefan74]

Originally Posted by gildo

We were looking to sell our home then buy another, but we found a smokin' deal and went for it so essentially bought another home before selling our current home, our mortgage broker bent over backwards and got us approved to make this new purchase. He is a great guy, but he no longer deals with our current bank (we knew that going in) and if we don't port our mortgage the payout is $8000. All indications from our end have been we would use the broker and go with him. We eventually sold our house in a week and now with a month to go we have a decision to make, port our mortgage or go with the broker who deals with MPAC. I feel bad for turning on him after all he did but $8000 is a lot of money and we only have 2 years left until we have to re new.

It may not be illegal, but it sure isn't right. You knew going in that he didn't deal with your bank and that there would be a buyout if you didn't port. On top of that, you gave him every indication that you would go with him. How much did you save with the "smokin hot deal"?

If it wasn't for him, would you have been able to buy the house another way? If not, you owe the guy big time.

[Traditional_Ale]

Originally Posted by flamefan74

It may not be illegal, but it sure isn't right. You knew going in that he didn't deal with your bank and that there would be a buyout if you didn't port. On top of that, you gave him every indication that you would go with him. How much did you save with the "smokin hot deal"?

If it wasn't for him, would you have been able to buy the house another way? If not, you owe the guy big time.

I agree. The man deserves to be compensated for his work. The tune of 8gr seems a little crazy, but if the OP is actually as remorseful as he is for taking a smoking hot deal without considering the caveats then who is anyone in this thread to judge, really?

If you can pay him out for his work and still not be out eight gr, then you know what needs to be done.