Grose says that besides the three-day right of recision, there may be other loopholes that can let a client out of the deal. In California, a borrower needs to provide funds to close. If the borrower doesn't provide the funds, he or she can kiss the mortgage goodbye. "If a client of mine doesn't want a product I've offered them, I don't want them to go through with the transaction," Grose says. "I will help them cancel it. The lender I'm working with may have a penalty for me, but I'm willing to take it because my duty is to my client."
The catch: Even though a borrower may get out of a loan, he or she may lose upfront fees already paid. Grose says the industry trend is for lenders to retain fees equal to their actual expenses.
But not all lenders' policies are firm. It may be possible to get the fees returned or to use them toward obtaining a lower rate through the same originator. As in all aspects of the mortgage transaction, it could pay to do some horse trading with the lender.
Gail Liberman is a licensed real estate agent and mortgage broker in North Palm Beach, Fla.