I have signed a contract to purchase a home with a local builder in my area. The builder has offered money as an incentive to be applied as a credit towards closing costs if I use their preferred lender. I have completed all of the loan paperwork with the preferred lender with the incentive listed as a credit towards closing costs in the documents as promised. After obtaining 2 additional loan agreements from outside lenders, both of whom have matched the rate of the preferred lender, I agreed to use the preferred lender to take advantage of the builder incentive.
The preferred lender agreed upon the matched interest rate with no points and I paid for and signed the Rate Lock Commitment. Two days after the Rate Lock was paid for and signed, the District Manager of the preferred lender has made contact with me and is now telling me that I am to pay a 1/2 point because the "other lenders were just matching their rate to get my business". He stated that the 1/2 point is a one time fee of $800 and can be taken out of the $4000 incentive the builder has allotted for closing costs. I advised the District Manager that the Rate Lock has been signed and paid for with NO POINTS therefore I will not under any circumstances be paying the 1/2 point. The Rate Lock prohibits me from using another lender and from what I understand, also binds the lender to honor the locked interest rate with no points. Please advise if my understanding of the Rate Lock is correct and if what this lender is attempting to do by taking a portion of the closing cost incentive is legal. Thank you for any assistance on this matter.
1 Answer from Attorneys
So you are concerned about financial services offered on certain terms, and a material change in the terms after commitment . Nevada law provides:
NRS 598.0917 “Deceptive trade practice” defined. A person engages in a “deceptive trade practice” when in the course of his or her business or occupation he or she employs “bait and switch” advertising, which consists of an offer to sell or lease goods or services which the seller or lessor in truth may not intend or desire to sell or lease, accompanied by one or more of the following practices:
1. Refusal to show the goods advertised.
2. Disparagement in any material respect of the advertised goods or services or the terms of sale or lease.
3. Requiring other sales or other undisclosed conditions to be met before selling or leasing the advertised goods or services.
4. Refusal to take orders for the sale or lease of goods or services advertised for delivery within a reasonable time.
5. Showing or demonstrating defective goods for sale or lease which are unusable or impractical for the purposes set forth in the advertisement.
6. Accepting a deposit for the goods or services for sale or lease and subsequently switching the purchase order or lease to higher priced goods or services.
7. Tendering a lease of goods advertised for sale or a sale of goods advertised for lease or tendering terms of sale or lease less favorable than the terms advertised.
(Added to NRS by 1985, 2255; A 1993, 1959; 1999, 3281)
Your attorney can explain further.