Tri-Emerald Financial Group review: Misleading disclosure, switch and bait tactics 5

In February of 2013, I signed a contract to buy an investment property in Temecula, California. I was shopping for a 30-year conventional loan for the property. My real estate agent kindly referred me to Robert (Bob) Krowel (DRE: [protected] NMLS: 173317) of Tri-Emerald Financial Group located in Lake Forest, California. He told me Bob could close the financing quickly. Since the contingency on the purchase was only 10 days or so, this would help. So I contacted Bob and after several phone calls and initial set of document, Bob quoted me a 30 year fixed rate of 3.75% along with GFE and a complete set of initial disclosure documents. Among other disclosures is a “Closing Cost Worksheet” which stated that I will receive a lender credit of $3, 375 (screen print below). Needless to say I was quite happy with the deal and the turn-around. The date was February 11.

Ten days later on February 21st I was able to remove all the contingencies for my purchase. When I contacted Bob to lock the rate. Things got changed.
First he claimed that I reduced the down payment amount from 25% to 20% and his initial rate quote was based on the higher down payment. I explained to him that I had never changed the down payment amount. It was always 20% to begin with. Nonetheless in order avoid a higher rate, I agreed to increase my down payment to 25%.
Second he explained to me that the rate actually increased “quite a bit” in the last 10 days. So despite the increase in down payment my new rate will still be 3.875%, a 12.5 basis points jump. The rate did increase somewhat during the 10-day period, but nowhere near this large, especially considering I also increased the down payment level. As a frame of reference, here is the historical rate information from Mortgage-x.com covering the same period.

At that point I had already removed all my contingencies. If I refused the financing, the only other option would be to call off the purchase. Unwilling to do so, I decided to go along with the deal.
I was then presented with another set of documents with modified rate etc. Missing in the document was the revised Closing Cost Estimate. Since the revised estimate was missing, I had no reason to believe it would be different. After all the rate change would only affect my monthly payment, why should it the closing cost? Besides the revised documents I sign off this time is only a subset of the original paper work, right?
In the evening of March 6th, when the signer showed up in my house with the escrow package, I noticed the lender credit $3, 375 quoted in the initial estimate had disappeared. Failing to reach him over the phone in the evening, I signed off the paper work. I had done more than a dozen purchases and/or refinancing in the past. There had always been something on the paper that’s not quite right. It was normal for parties to amend the escrow to correct clerical errors. I wasn’t too worried.
When I was able to reach Bob on the following day, he told me the lender credit was not available anymore. “I cannot give you the credit anymore. I was not able to get that because the interest rates have went up. You and I have discussed this and you said you wanted the lowest interest rate.” No we did not discuss this point Bob! We talked about rate change and you had me sign a revised document; we talked about the down payment increase and you had me sign a revised document; we supposedly talked about you taking away more than $3000 from the deal and you didn’t even care to ask me to sign a revised document?
It is clear to me Bob Krowel in this case breached his fiduciary duties as a real estate agent. He engaged in a bait-and-switch tactic through the deceiving practice of improper disclosure. He took advantage of the uncertainty period before the rate lock takes place, and put his customer in a hard position to choose between canceling the purchase and accepting his outrageous fees.
I have since made several attempts to engage Bob for a rational discussion. Unfortunately at that point he seemed to have lost his mind, babbling things like he should have just canceled the deal and I was lying about not hearing what he told me. Eventually I was referred to Bob’s manager Nick. Nick reviewed the email chain and paid me a rate change fee Bob initially promised but charged me anyway and refused to refund. On the dispute of improper disclosure, Nick sided with Bob and refused to acknowledge the issue. From my research Nick is not a registered agent. Nor did he claim to be.
I have subsequently requested that Nick escalate this matter to the company’s owner, Mr. McQuiggan. Despite repeated promise, I have never received any phone call or message in that regard to date.

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