You never mentioned that you locked your rate in during your first discussion with this lender. To allege that a mortgage company is somehow "fraudulent" because you did not LOCK your interest rate is really an unfair accusation to make.

While i understand that you may be disappointed that the interest rates had gone up on you between your 1st contact with this company and the time that you decided to move forward (which you indicate was at least several days apart) - it does not make it fair to call them fraudulent b/c rates had gone up in between, - when in fact you never locked your rate in to begin with.

This is akin to calling your financial planner or stockbroker "fraudulent" because they said Wells Fargo stock was ony $8 per share in the beginning of March 2009 - but is now north of $15 per share a few weeks later when you decided you wanted to buy it.

At the end of the day - most financial products are market based and are priced according to the movement of such markets. If you did not secure your interest rate and lock it - then ultimately you must take responsibility for that and not try to pass the buck or blame someone else... or even worse - turn it into a demand for free airline miles.