We applied with Bank of America in May for a refi. We were told it may take 90 days to process the loan, for the rate we were getting we thought ok why not. Five months later, 3 credit reports run (1 unauthorized), twice they asked for and recieved bank statements, and tax return. We were notified the 7th of October that due to the income reported on our tax return, they could not fund the loan. We owe $52,000 on the house and have a $30,000 second equity loan. Property is valued at $135,000. Credit score is upper 800's. We feel we should have been informed much earlier as to our ability to recieve the loan, we have been locked in with B of A for 5 months, we should have been able to go elsewhere. Now we will lose a rate we could have recieved with another lender. Do we have any legal recourse? have our rights as consumers been violated during this process? if so, who do we complain to. Any advice on this matter would be greatly appriciated.

Sincerely,

Rachel

I would shop with an Honest broker in your area.  You might still be able to get close to the original rate.  Brokers can usually offer a little lower rate than the big banks.

PS.  I only Lend in the State of Florida.

Rachel---Rates should be very competitive to what BofA was quoting 5 months ago. I believe BofA retail is at least 1-1.5% Points out of the market right now on 30 year fixed rate product.   Move on, grab a great rate while they're available. 

Rachel, I understand your fustration and the answer to your question, "do you have legal recourse", is possibly. Howeer, by the time you spend money for attorney fees, court costs, etc., sadly, the outcome may not be worth the frustration and costs. I would agree with Melvin and Bob, check out Brokers that are members of NAMB (http://www.namb.org), to see if it is still advantageous to refinance.  Interest rates may be at or below the rate that you were quoted by B of A.  The sad fact is that mega banks (not unlike any other mega initity in America)have more capital than you or I have, and sometimes it is better to move on, realizing that you will never again do business with that enity. A possible consolation is that bad publicity will ultimately hurt stock holders inome.