Closing Cost Fees - Specific Questions (insurance, loan officer, rate, loan)

[sierraAZ]

I just had my mortgage counselor changed (layoff, I'd imagine) and it seems like all hell broke loose... The GFE I received from her doesn't have much in common with the previous ones I had. I'd like to hear what people in the business think about it.

- On the 1st GFE there was an Underwriting Fee of $200 and Lender's Document Prep Fee of $250 (I believe even in the 1st scenario the latter is junk). On the new one there's an Underwriting Fee of $295 and Processing Fee of $295. Is EITHER of these pairs normally charged together. Is a Commitment Fee different or is it the equivalent of Lender's Document Prep Fee or the Processing Fee? Because that's what I read about it:

Commitment Fee ($200 - 1% +)

This is often a junk fee, especially if a processing fee and a underwriting fee are charged. I know of one reputable lender that uses this word synonymously with the underwriting fee. You should always ask what the fee covers; if your loan officer doesn't know immediately, or has to "check with someone", that is a sign that you may want to move on either because the fee is bogus, or the loan officer doesn't know his or her job. Bottom line here is two points:

If you are paying a commitment fee along with an underwriting fee AND a processing fee, this is most likely pure profit to the company and can be negotiated out.

That's what she says about the Underwriting Fee: The underwriting fee
was based on your old lot that you had purchased the beginning of the
year. What does the Underwriting Fee have to do with the lot?!

- On the first GFE there was a Document Preparation Fee (3rd party) of $70. Worth it or not... you obviously expect some overcharge and/or junk fees, so that's OK.

Now there are junk fees worth $220 added at the bottom of this GFE
(electronic doc delivery fee $50, title courier fee $20, doc stamps fee
$150 (any input on this? ).

She said: These fees were changed by the 3rd party title company these are there fees and can not be changed or waved.

If it were true, how come they didn't show up before...?! Also, there hasn't been a change of title company.

- Lender's Title Insurance was $275 on the other GFEs. Now it's $465!

She said: This fee is again a 3rd party title fee which is based on your Loan Amount. Per the matrix that we have to go off of your loan amount... I am not sure why this was ever lower than that amount.

So, two different loan counselors go off different matrices (whatever that is)... The only thing that has changed is the amount of the loan - it's significantly LOWER now! Title company's the same.

- About the discount points buying down the mortgage rate: I don't have my notes with me right now, but I recall getting the rate down by .25 on a 30-60 day lock was costing a few hundred dollars... perhaps $500-600 max. I'm really not sure off the top of my head, but it definitely wasn't more than 1K. This new person is telling me that 1.375 discount points = $1,985 will buy the rate down to 5.75% today, provided she quoted me 6% (so the rate is about the same today; nothing's changed considerably within the past two days) without paying discount points.

The bottom line is, we're talking about builder's in-house lender who basically wants to take away all the money you're given as incentives. That I DO understand! What I don't understand is how everything can vary so much while dealing with different people... Not that the first one got everything right immediately, but I had it smoothed and straightened out by now. With this change, I'm back to square one and extremely frustrated!

Of course, I wasn't born yesterday and I'm aware there's no way around paying SOME junk fees, but I'd think the fees I saw on the first GFE would stay the same. Not so...

Now I'm reading this (some website):

Junk Fees Are Never Locked: When lenders “lock the rate,” they commit to a specified rate and points known to the borrower. Except for a few lenders, they do not commit to a specified amount of total junk fees. The Good Faith Estimate (GFE) that lenders are obliged to provide borrowers shortly after receiving a loan application, shows all fees but doesn’t bind lenders. They can revise the GFE right up to closing.

So, does that mean I'm at their mercy until closing and should expect more "surprises"?! And now that my "relationship" with the new counselor started on the wrong foot, I suppose I should expect to be ripped off in every shape and form... So far, the actual loan officer is "playing dead" and not getting involved in the matter, but I'll certainly get him involved if I can't resolve it on my own with the counselor.

Would appreciate your thoughts on my concerns.

[renriq02]

May not necessarily be 'junk' fees. Some lenders hire a processor/underwriter to do the work. Their fees range around 500 each.

The lender can call it processing, commitment fee, I wanna charge you cuz I feel like it fee, etc.

Review the 800 lines....and add them up for every lender.
Some lenders might have different names for each fee or may not charge those fees.

The way to shop is using the 800 lines ONLY for a lender.
You can use the 1100 lines to shop for an attorney/title company.

Some lenders may have no fees but a much higher rate....

Most lenders lock the rate not the fees....and it's up to you to see how honest the person is.....

When I send out disclosures that include the TILA, Good Faith, etc..the pages add up to around 20-30 pages. Most of my borrowers feel safe knowing that I have to disclose everything as a broker. When they go to the bank they only receive about 4-5 pages....


Shop around...and look at the Rate, APR, and the 800 lines.

[sierraAZ]

Originally Posted by banker0679

May not necessarily be 'junk' fees. Some lenders hire a processor/underwriter to do the work. Their fees range around 500 each.

The lender can call it processing, commitment fee, I wanna charge you cuz I feel like it fee, etc.

Review the 800 lines....and add them up for every lender.
Some lenders might have different names for each fee or may not charge those fees.

The way to shop is using the 800 lines ONLY for a lender.
You can use the 1100 lines to shop for an attorney/title company.

Some lenders may have no fees but a much higher rate....

Most lenders lock the rate not the fees....and it's up to you to see how honest the person is.....

When I send out disclosures that include the TILA, Good Faith, etc..the pages add up to around 20-30 pages. Most of my borrowers feel safe knowing that I have to disclose everything as a broker. When they go to the bank they only receive about 4-5 pages....


Shop around...and look at the Rate, APR, and the 800 lines.

Thanks, but I was talking about the same lender (builder's in-house lender; you know... incentives going towards closing costs) - just dealing with two different loan counselors. That's why I'm so puzzled and mad.

[renriq02]

you ARE at the mercy of the builder...you can research Beazar and see how they ruined a lot of lives here in NC.
They switched the products/rates/fees at closing...and lied on the applications to make the borrower qualify.


stamps are generally charged by your STATE...it's normally a tax that the state charges.

underwriting has nothing to do with the lot...it's to pay the underwriter to UNDERWRITE YOUR FILE.


What is your loan amount?


Edit* n/m sounds like you're around 145k.

You should receive 5.875% for 30yr fixed FHA. No discount points.....1 origination fee.

SHOP AROUND!

[sierraAZ]

Originally Posted by banker0679

you ARE at the mercy of the builder...you can research Beazar and see how they ruined a lot of lives here in NC.
They switched the products/rates/fees at closing...and lied on the applications to make the borrower qualify.

Well, I don't think it'll get THAT bad... at least I hope so. I'm on top of my things and I'm not ignorant. First, they want to sell the house badly. Second, I'm as perfect of a borrower as they come.

stamps are generally charged by your STATE...it's normally a tax that the state charges.

If it's a legitimate fee, then how come it wasn't on the GFE before...? That's what I'm questioning.

underwriting has nothing to do with the lot...it's to pay the underwriter to UNDERWRITE YOUR FILE.

I was pretty sure it doesn't. It doesn't make any sense.

What is your loan amount?

Edit* n/m sounds like you're around 145k.

You should receive 5.875% for 30yr fixed FHA. No discount points.....1 origination fee.

SHOP AROUND!

Yeah, it's about 145K. The other day they quoted me 6% with origination fee (1%, which they pay anyway) and no discount points. I don't really feel like changing more horses midstream for that kind of a difference because it will be also a struggle to get the incentives. They're given to you on the condition of using their in-house lender.

[renriq02]

i would stay with the 6%......

Remember that Good Faith Estimates are just that 'Estimates'.

There's a disclosure statement right under the top words of Good Faith Estimate indicating what you're about to read

[sierraAZ]

Originally Posted by banker0679

i would stay with the 6%......

Remember that Good Faith Estimates are just that 'Estimates'.

There's a disclosure statement right under the top words of Good Faith Estimate indicating what you're about to read

I know some of the costs are not set in stone, but those should be just two IMO - the homeowners insurance and the days of interest (depending on the date of closing). There's no good reason for the rest to change.

It's totally beyond me why two counselors working for the same lender would add totally different fees (type- and amount-wise) ...

[renriq02]

well if they broker their loans then it's safe to say that each lender has their own fees.

When I submit a loan to Bank A...they can charge a 515 underwriting fee with a 73 tax cert fee.
With Bank B they may charge 395 only

Originally Posted by sierraAZ

I know some of the costs are not set in stone, but those should be just two IMO - the homeowners insurance and the days of interest (depending on the date of closing). There's no good reason for the rest to change.

It's totally beyond me why two counselors working for the same lender would add totally different fees (type- and amount-wise) ...

[sierraAZ]

Originally Posted by banker0679

well if they broker their loans then it's safe to say that each lender has their own fees.

When I submit a loan to Bank A...they can charge a 515 underwriting fee with a 73 tax cert fee.
With Bank B they may charge 395 only

Well, I'm afraid we're having a break-down in communication...

Do you mean that each loan counselor (not even loan officer) working for the same builder's in-house lender brokers the loans to different banks...?! I'm not sure I'm following... I know they're likely to sell the loan soon, but this certainly happens after closing.

[renriq02]

only if they're a broker would this apply.

i work for a company and have my own preference of lenders that i like to use. ( we work with over 440lenders)

another employee may have their own preference in who she/he uses.


If they're a direct lender then this wouldnt apply...it would be the loan officer trying to tack on fees to make more money