However if you bought the house for $235,000, and it was only worth $149,000, an attorney may be able to argue that the lender was in cahoots with the seller or the seller’s agent and they conspired and committed fraud to get you to pay too much for the house.

Whether or not that argument will work, I do not know.

However a person that I am acquainted with did have that happen to her. The Real Estate company and REALTOR was also the mortgage broker and they were also the listing agent on the property that they sold her.

I do know that she paid far more for the property than it would have appraised for, if the appraiser and lender were truly neutral third parties.

I referred her to my real estate attorney.

My attorney has recently filed a lawsuit on her behalf againt the real estate company and the REALTORS that sold her the house, and the mortgage broker that handled the financing.

Unfortunately the wholesale lender that actually provided the financing went bankrupt several months ago, but the real estate broker and the mortgage broker still have some assets and my attorney says that he expects that she will win her case.

I would expect that if something like that happened in your case, that you would have a very good lawsuit against the REALTORS and the lender.

I would think that one of the options that the lender might have to settle the case rather than lose a very nasty and embarrassing lawsuit would be to reduce the amount of the loan by the amount of money that you overpaid for the house.

If this was a refinance I would think that a logical settlement would be a reduction in your principal amount by the amount of the fees that you paid and the fees that the lender paid the mortgage broker for your loan.

Note: The lender pays the mortgage broker for your loan. The higher the interest rate and the more unfavorable the terms are to you, the larger the amount of the fees are that are paid to the mortgage broker.

Since you are paying an excessively high interest rate for those fees, logically those fees shoud be returned to you in the form of a reduction in the amount of principal that you are owed.

Also, since the lender paid the mortgage broker to write a loan with very unattractive terms to you , another logical settlement for the lender would be to reduce your interest rate to the interest rate and terms that you would have received if your mortgage broker had been honest.

Then the lender can go after the mortgage broker to recover the excessive fees that they paid the mortgage broker.
References :
My experience. Over 40 years investing in real estate.