Early Payoff - Angry Lender Demanding Money
My dad recently got a conventional loan on a home. Around 2 months later, we came into an unexpected inheritance from a family death that allowed him to pay off the mortgage and become finally debt free.
He recently received an angry text message from the local mortgage lender who is associated to Atlantic Bay. He stated that he received a YSP (yield spread premium) clawback demand for the profits that he made when selling our mortgage to an investor. He still collected fixed fees like underwriting and processing that he doesn’t have to pay back. This was around 4,700. He stated he intended to collect on this and would send us to collections if he had to.
I reviewed our note and our closing disclosure. The prepayment penalty is check no.
Is this allowed? Wouldn’t this be the agreement between the investor and the originator since it is not in our loan documents?
For reference, we basically used the entire inheritance to get him debt free (strictly just his mortgage). Another 5k would be tough to pay and the aggressive messages he sent makes it harder to just want to pay the guy.