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Old 05-20-2015, 07:56 PM
 
3,313 posts, read 4,095,368 times
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Quote:
Originally Posted by SmartMoney View Post
It's true, but will it work? Only if the threat gets to someone that completely comprehends the business.

The penalties are much larger than you would think. It depends on how the loan is being delivered, but on average they would have to pay a 1% penalty +'their earnings (what they made on the loan), possibly more. Almost all loan officers have a clause in their compensation agreement if any loan that pays off that was originated in the past 6 months, the commission must be paid back.

EPO's are a big deal in the mortgage biz. Now, the trick is figuring out before you start to make noise is if it applies. Almost all builder mortgage companies (owned by builder, not a preferred lender, two completely different things,) would be in the penalty category. (Almost anyone that delivers their loans to a third party - not Fannie or Freddie, but WF or other bank).
Thanks for sharing! It's a great info! I assume if builder partially own the lender (since they disclose financial interest if their lender is used), this lender is in this category.
The only possible issue I see is the cost fro buyers in case of refinancing. But since you mentioned it would be cheaper, it make sense to do it.

The builder I have in mind asked to indicate what lender buyers intend to use by the time of signing the contract which is half a year before house will be complete. They also wanted commitment letter from a lender soon after signing the contract. My loan officers I was working with before said they cannot provide one since the house is not even build yet. And they must have contingencies (financial and appraisal) - while builder doesn't want to see any. To make story short, builder is pushing towards using preferred lender, and I am not even sure buyers will be able to switch to another lender before closing since they indicated they will be going with builder's lender. This trick with refinancing soon after the closing might help I think.
As of now comparing preferred lenders % and closing costs vs other trusted lender, first one quoted higher % (0.25% higher) and their closing cost is about 20% higher compare to other lender (due to higher origination fee and some other fee I forgot they mentioned). Their incentives towards closing does not make sense if you are using calculator.
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Old 05-20-2015, 09:25 PM
 
Location: MID ATLANTIC
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You should be able to find a lender that can handle an apptroval (commitment) and an appraisal on specs and plans. As a builders preferred lender, this is not impossible.
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Old 05-21-2015, 12:35 PM
 
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Thanks everyone. I was able to negotiate with preferred lender and now their rate is pretty much the same as everyone else is quoting me. I'm still getting around 3000 plus 2500 (title insurance). Their origination fees is around 2000 while i was able to get close to 0 with other lenders. So in net im still getting around 3000 benefit by going with the preferred lender.
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Old 05-21-2015, 01:22 PM
 
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It's good to know preferred lender was negotiating! Congrats!
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Old 05-21-2015, 05:18 PM
 
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Our GFE came back with much higher out-of-pocket than we planned on. We can cover it but, should we? So we inquired with another lender - our own bank. We are waiting to see what they can do for us. Their GFE should come via FedEx tomorrow. We have until Monday for the first one. The first mortgage company/broker came recommended by a realtor that we are not using. We're representing ourselves. Sort of nerve-wracking but... luckily (for me) my guy is a master negotiator. I'm so thankful for him.
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Old 06-24-2015, 08:35 AM
 
3,313 posts, read 4,095,368 times
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Quote:
Originally Posted by hunterseat View Post
Our GFE came back with much higher out-of-pocket than we planned on. We can cover it but, should we? So we inquired with another lender - our own bank. We are waiting to see what they can do for us. Their GFE should come via FedEx tomorrow. We have until Monday for the first one. The first mortgage company/broker came recommended by a realtor that we are not using. We're representing ourselves. Sort of nerve-wracking but... luckily (for me) my guy is a master negotiator. I'm so thankful for him.
Any updates?
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