Question by Yingnan: can I sue mortgage broker for not giving me commission rebate?
I am doing my refinance with one mortgage broker. Before closing, he asked me to pay $ 480 more for closing because he said the is some law forbid him to give me more rebate. But he said in his email clearly that he is going to refund me this money one week after the closing. Three months later, he said he doesn’t know when he can give me the money and start to ignore my email and call. I feel like he is lying at the beginning and what I can do for this issue?
Answer by dog ma
He cannot legally give you any of it under federal law. He could have arranged to help with certain closing costs or gotten you a slightly lower interest rate, but he cannot give you any of his earned income.
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I guess you can take him to small claims
If mortgage brokers are licensed in your state, you can probably file a claim. What he said he would do is called a kickback and is probably not even legal.
Rebate happens above the board = clearly spelled out
Kickback happens under the table
It is illegal for him to give you any money at all. You can not sue anyone trying to force them to commit a felony. No judge will rule for an illegal act.
What he did is illegal under RESPA. Call his office and ask for the branch manager. Tell him what happened and tell him that you are going to report the company and loan officer to the NMLS (National Mortgage Licensing System)and file a claim. That should get you action!!
You can look up the NMLS online.
You can only sue him if what he was offering you was legal to begin with. If it is considered illegal to offer rebates as enticements on mortgage loans, then you can use the court of law to enforce and illegal transaction. Did you consult with another mortgage company and see if they would offer either the same rate or offer? Most likely if this was not in corporate brochures, then it is not a legal practice.