Refinancing a mortgage is often a way to reduce interest rates or lower monthly payments, but errors made by lenders can lead to unexpected financial losses.
When a lender miscalculates terms, the borrower may face higher payments, increased interest, or other financial setbacks. In Maryland, borrowers have legal options to address these issues.
Identifying miscalculations in refinancing
Miscalculations can happen in several ways during refinancing. Lenders might incorrectly estimate the interest rate, loan amount, or closing costs. These errors can lead to a borrower paying more than expected.
In some cases, the miscalculation may result from overlooking property taxes, insurance, or other financial obligations tied to the mortgage. Borrowers should carefully review all documents to spot any potential errors before closing.
Legal recourse for financial losses
Maryland’s Consumer Protection Act protects homeowners from unfair or deceptive practices by lenders. This law may apply if a lender intentionally or negligently misrepresented refinancing terms. Borrowers can file a claim for damages to recover financial losses caused by the error. In some cases, this may include reimbursement for overpayments, legal fees, or other related expenses.
Correcting lender errors
Once an error is discovered, borrowers should first notify their lender to request a correction. Many lenders will work with the borrower to resolve the issue. However, if the lender refuses to correct the mistake or the error leads to significant financial harm, pursuing litigation may be necessary. Borrowers in Maryland have the right to challenge miscalculations through legal action and seek compensation for damages.
Borrowers should always double-check refinancing terms and know their legal rights to avoid costly errors that could impact their financial future.