Legal Question in Real Estate Law in Illinois

Can you please help us? While this sad and perplexing story is quite long, I will do my very best to provide you with the �cliff notes� version. We believe that we may be the victims of unscrupulous activities. In April, we stopped in to a Chase branch in the Western Suburbs to obtain some assistance. While we were talking to a personal banker about a separate matter, we were approached by a loan officer and talked into re-financing the mortgage on our house. In August of 2008, we purchased a house in Clarendon Hills for $400k; we have a Chase mortgage with a high 7.125% rate. We believe that we were bamboozled into applying for a re-finance of our mortgage. The loan officer told us that we would only need to pay $750 as an application fee and we would need no more than $1,500 at closing. We locked in a rate of 5.5% and this rate would expire on 07/08/09. At the end of May, the appraisal that was initiated by Chase was completed and by mid June we received the fantastic news that our house appraised at $400k (the same price that we purchased the house for). Please also note that when we were purchasing our house, it appraised back in August 2008 two different times at $400k. At this point, we were elated and relieved that everything worked out. Then, approximately two weeks before our rate expired, my wife followed up with Chase since we did not receive any follow-up whatsoever from the loan officer during the entire process and my wife learned that no closing date was scheduled. My wife was told repeatedly by Chase when she initiated the contact that our paperwork was in Underwriting and was marked for escalation. As the rate expiration neared, on 07/02/09, the loan officer was informed by my wife that we would be at a wedding out of state during the long holiday weekend. Yet, we received a call and e-mail by the loan officer informing us that the Underwriting department required three documents from us as well as a �satisfactory field review� which was the bank�s responsibility. Because we were out of state and unable to immediately comply with providing the needed paperwork, Chase extended our rate expiration to 08/04/09. By mid July we were notified that the �field review� came back and valued our house at $390k ($10k less than the original appraisal). So, therefore, you are telling us, that our house in Clarendon Hills (next to Hinsdale) has lost a value of $10k in 11 months? Please note that the second appraisal was done by the exact same appraisal company! The reason noted on the second appraisal why it was less than the first one was because we live on one of the six blocks in the village that they say does not have �superior� school districts as the rest of the Clarendon Hills village. �Superior� is very subjective! So, is it worth $10k? How did they come to this unfounded point? Was the appraiser simply appeasing the Underwriter? What would have happened if our house appraised at $410k the first time? Furthermore, in the appraiser�s report, there were only three other comps in our same school district and the third was our house! I am quite confident that an appraiser cannot utilize the house that they are appraising for a comparable! What does the word comparable mean anyway? We wholeheartedly believe that Chase came up with this last minute �field review� so that they could get out of giving us the lower rate mortgage terms or at least collect a hefty closing cost check. We would have definitely have accepted the second appraisal if it was executed by a completely different company as the first one. Don�t you think to be fair to us; Chase should have utilized someone from a different company? The first appraiser was simply criticizing the first appraisal and/or looking for something wrong in the first appraisal. Actually, we cannot even be sure if the second appraiser was in our neighborhood. The appraiser certainly did not go inside our house! It doesn�t quite seem fair, does it? It truly feels like the guy who appraised the house the second time needed to appease the underwriter and come up with a reason why we would not get our loan for the specific terms that we want! When we tried to discuss our thoughts, concerns and disgust at this situation, our heartfelt pleas fell to deaf ears by everyone we talked to at Chase (including our Sr. loan officer And, I think that I would have a better chance of talking about anything to President Obama then trying to reach the untouchable Underwriters. Apparently, they talk to no one! So, where we stand now is that our loan has been approved, but now they are telling us that because it did not approve for $400k the second time our interest rate is acceptable, however the bank is telling us that we need to bring $10k to closing. Are you kidding? How did we go from $1500 to $10k? Do you have a spare $10k in this economy? We certainly don�t and the entire reason why we were taking out the loan was to save money each month on our exorbitant mortgage payments. So, you can purely see how this is not fair and we believe that we are being taken advantage! Can you please help? Hoping you can assist us! Do we have a legal leg to stand on?

Thank you for your free advice.

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