FEDERAL WAY, Wash. - Jeffry and Eryn Nelson needed to get out of an adjustable rate mortgage before their payments went up.

A broker-friend at Ace Mortgage in Phoenix offered to help them refinance, including forgiving the $5,000 broker's fee, paying off $3,700 on their Sears card and paying off their car balance of about $11,700.

KING

Eryn Nelson and her husband refused to sign when the paperwork for their mortgage was changed.

"It makes it a little easier for us to pay, we'll be saving about $500-$600 a month," said Eryn.

They signed on the dotted line, but a supervisor at Ace changed the agreement, keeping the $5,000 broker's fee and not paying off the Sears card.

The company faxed the Nelsons the new paperwork, but they refused to sign.

"Because where we normally would write in the date, they had written the date on the 24th and I didn't receive it until the first so I'm not going to sign something that was past dated," said Eryn.

Mortgage specialist Dean Wegner said Eryn did the right thing. By law, he says, any application changes must be disclosed.

"It's normal for things to change small but for it to change this much, I mean there's some big time violations on this thing, this is bad," he said.

In Phoenix, Ace Mortgage spokesman David Osterman said they would study the case.

"We have a large corporate headquarters compliance department that we can definitely get that resolved with," said Osterman.

The Nelsons complained to the King County Prosecutor's Office, which fired off a letter to Ace Mortgage in September. Within a few weeks, Ace Mortgage sent the Nelsons a check for $5,000 -- the amount of the broker's fee. 

The Nelsons still have to pay off their Sears card on their own, but say their new five-year adjustable rate mortgage saves them about $400 a month.