HELOC Situation

I selected a HELOC provider then the following events happened:

1. The Bank sent me a "Letter of confirmation" stating the amount and specific % rate it would begin with (only adjusted by prime increases/decreases) as it was an ARM.
2. No TIL statement was sent to me before the closing so I only received the written 'Letter of Confirmation.'
3. At the closing the document TIL statement did not contain the overall amount to be paid or the total % that would be paid etc (ie., incomplete TIL).
4. Further this TIL was placed at the end of the closing document instead of at the front. From what I have read, "The timing requirement is that these disclosures be provided to the consumer before consummation of the agreement." This was not done before (did not receive a TIL or good faith statement in mail) or during closure re., positioning of the APR in the document.
5. Having gone through signing most of the document and upon reading at the end the 1% increase in the APR (verses that clearly state in the Letter of Confirmation) I refused to complete signing of the document.
6. The closing notary took the document with her and contacted both the bank and closing company to say the closing had failed because of the interest rate switch (notary has stated this to me in a signed letter). I also contacted the bank immediately and told them the signing was terminated due to a "switch" (documented in the confirmed interest rate vs closing document).
7. Bank said they would send new documents with correct rate stated.
8. Bank rep also contacted notary to tell them to 'destroy' the closing documents as there was an "error in the stated % rate" and they would send new document (again all this is stated in a signed notaries letter - fortunately the notary did not destoy the document and it is still in their possession).
9. Bank never sent new document!
10 Three weeks later I was informed they had closed the HELOC and paid off my original HELOC with another bank.
11. Upon my pointing out that this had not closed and their bank rep (+ closing company had been told the closing had terminated) this bank immediately tried to get their money back from the bank they had paid off; the other bank over several months refused!
12. Now they want their money back from me but will not give me the HELOC originally % rate or amount promised in writing (% rates have since one year plus now gone up).
13. The bank refuses to acknowledge any wrong doing (despite documented bait and switch - potential federal TIL violations) and blames their closing company!
14. I think I have a case for taking both bank and closing company to court for 'bait and switch,' federal TIL violations and potential fraud (re., opening a HELOC in my name for $$ commission gains) while also still asking for the original HELOC.

Any comments would be welcome.

In the interests of space here on the forum, I'll try to keep this as brief as possible. A "letter of confirmation" isn't typically considered a "commitment letter" unless there is a specific stated guarantee within the body of the letter. The interest rate, terms, mortgage amount should be guaranteed for a period of time, i.e. 30, 45 or 60 days, for examples, along with a stated date of expiration. Unless that appears somewhere within your letter, you received a standard approval letter which did nothing more than outline the terms of the lender's approval. It may have been under the same terms you applied; it may have changed somewhere along the process but unless the language within commits the lender, it simply isn't a guarantee. Did you specifically request your lender to lock in your loan? Did they ever present you with proof of the lock-in? Unless that occurred, your loan was subject to current (and recently very rocky) prevailing rates/terms.

In regards to the TIL, I'd suggest you thoroughly review all paperwork sent to you or presented at the time of application. A prelim TIL is required by law to satisfy the timing requirement; that along with the Good Faith Estimate are required to be either physically given you or mailed within 3 days of your application, if there wasn't a face to face interview at the time. Even if you can't find either, the lender should have copies in their files .. you can request duplicates be sent to you even now. Check the prepared dates for the required 3 days (from the date on your preliminary application) .. unless that's incorrect, in my opinion, the lender can document compliance with the law. The lender should have proof both documents were in fact prepared, regardless of whether you actually received them. (They can't be held accountable for the US mail system and non-delivery.) There's simply no law that states the actual order of presenting closing documents to a potential borrower at closing and the fact that your final TIL was botched so badly simply doesn't constitute a "bait and switch." By your description, you had one of the worst closings in recent memory, but I don't see grounds for successful litigation based on that factor alone. You state refused to sign some documents; you in effect cancelled the closing (it can be argued by the lender) but I'm concerned that you may have signed the actual mortgage and/or note or similar document which would've in fact bound you to the terms of the loan, in my opinion. Again, I'd strongly suggest you obtain copies of ALL documents, if you don't already have them and have each of them thoroughly scrutinized.

It's impossible to make an accurate call here without physically reviewing all documents from date of application to closing. Again, I'd suggest you obtain as many as available from the lender and in a case such as this, contact an attorney to help review everything. It would depend on the actual agency agreement between the lender & the closing company; an attorney can review the language in that agreement to determine which party would be held accountable. My point in answering here isn't to discourage you from pursuing possible legal action, it's simply to advise that there's much more involved that you might not have previously been aware of. Banking laws have tightened drastically on lender responsibilities and while you certainly didn't receive the most professional (or possibly even ethical) service, they may in fact have satisfied current federal/state laws. Keyword: MAY. You also may want to research the particular lender to see whether or not similar complaints have been filed as well.

Hope this helps. Good luck.

Thank you very much for taking the time to provide me with alot of pointers that I will be considering as I move forward with my HELOC situation.