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Old 08-27-2008, 01:22 AM
 
35 posts, read 140,029 times
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I mean escrow, they're putting 10 months for property tax. So the prepaid taxes and insurance are around 7,500 and the rest goes to other fees but no points.

What do you mean by "within 3 days of application we should be provided with a GFE, TIL and APR disclosure." Are you referring to loan application? What is a TIL? We don't have a APR disclosure. Is that seperate from the GFE?
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Old 08-27-2008, 08:00 PM
 
Location: Cary, NC
1,036 posts, read 3,628,214 times
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Quote:
Originally Posted by solanoMan View Post
I mean escrow, they're putting 10 months for property tax. So the prepaid taxes and insurance are around 7,500 and the rest goes to other fees but no points.
10 months for taxes is excessive. Usually they can only hold 2-3 months of taxes in escrow. If the bill is due for 2008 now, they could ask you to pay the rest of the year (date of closing until 1/1/2009) but they can't just put 10 months of taxes in a reserve account, government regulations prevent that. If not, lenders could in theory say you need to pay 1, 5 or why not 30 years of property taxes upfront?


Quote:
Originally Posted by solanoMan View Post
What do you mean by "within 3 days of application we should be provided with a GFE, TIL and APR disclosure." Are you referring to loan application? What is a TIL? We don't have a APR disclosure. Is that seperate from the GFE?
Just as it sounds. When you apply for a loan, a lender is required to provide you with disclosures within 3 days of application. These include a GFE and a truth-in-lending (TIL). The truth-in-lending shows your APR (annual percentage rate) so that you can compare those. Lenders are by law required to provide an APR with interest rates on all ads. You can quote just APR or APR + interest rate, but not just the interest rate as it is deceptive.

A pre-qualification is one thing, but if you submitted a formal application or entered into a sales contract you should have been provided a whole lot of disclosures.
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Old 08-27-2008, 08:30 PM
 
35 posts, read 140,029 times
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We have nothing except for the GFE and email transcripts of our inquiries. They never disclosed those things to us. We even asked them about the float down option we were told by the builder's agent during the signing and the loan officer said they don't do float down for short term locks. So we were very frustrated because most of the things they told us were inaccurate/lies. So we requested documentation/policy that states all their rules/process but the loan officer said that it's for internal use only.

They require 10 months of prepaid property tax and nothing less. We asked if we can have something less and they said no.

How is the prepaid property tax/insurance used? Does it go back to us?
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Old 08-27-2008, 08:44 PM
 
Location: Cary, NC
1,036 posts, read 3,628,214 times
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Quote:
Originally Posted by solanoMan View Post
We have nothing except for the GFE and email transcripts of our inquiries. They never disclosed those things to us. We even asked them about the float down option we were told by the builder's agent during the signing and the loan officer said they don't do float down for short term locks. So we were very frustrated because most of the things they told us were inaccurate/lies. So we requested documentation/policy that states all their rules/process but the loan officer said that it's for internal use only.

They require 10 months of prepaid property tax and nothing less. We asked if we can have something less and they said no.

How is the prepaid property tax/insurance used? Does it go back to us?

Prepaids are held in an escrow account until they need to be paid to the county/city and the insurance company. When you refinance, sell or pay off the loan they need to refund you any money in the account within 30 days.

Still, there is a law that says they need to provide you a yearly disclosure on the amount in the account and the way the money is coming in and out. If there is not enough, they ask you for more. If there is too much, they need to refund you the excess. There is a limit to how much they can keep and 10 months is too much.

Want to hear it from the horses mouth, how about HUD: HUD RESPA FAQs by Consumers about Escrow Accounts (http://www.hud.gov/offices/hsg/sfh/res/respafaq.cfm - broken link)

>>The RESPA statute and regulations do not require the lender to maintain a cushion. However, since 1976 the RESPA statute has allowed lenders to maintain a cushion equal to one-sixth of the total amount of items paid out of the account, or approximately two months of escrow payments.<<


This is a RESPA rule that applies to all lenders. But it seems your lender has already violated a few rules about disclosures. I would seriously speak with your Realtor and perhaps a real estate attorney. If this is them at the start, who knows what else is going to happen during the process.
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Old 08-28-2008, 06:48 PM
 
Location: Not where you ever lived
11,544 posts, read 25,086,443 times
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Get a lawyer
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Old 09-01-2008, 01:18 PM
 
5,409 posts, read 4,660,858 times
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Quote:
Originally Posted by solanoMan View Post
The builder offered to pay 12500k for closing cost if we use their lender. We are putting 20% down payment for the home and we will not have enough money to pay all the closing cost so we agreed to purchase the home. The lender said the closing cost would be around 10k to 15k. So we figured that we can still cover the difference if the closing cost ends up to be 15k.

Before we signed the purchase agreement contract, we were told by the lender that the interest rate is 6.625 and our payments would be around 3100. We were not even pre approved with their lender when we signed the contract. They just pre qualified us the same day. But we were already preapproved with a different lender.

Four days after the signing of the contract, we receive a GFE from the lender. We were quoted for a 6.5% interest with 1 discount point. We told the lender to send us a GFE with 0 point. We got the GFE the same day and we were quoted with a 7.0 interest rate with 0 point. We asked the lender about the 6.625 interest rate we were quoted a couple of days ago during the signing of the purchase agreement. She said that the rate she gave us includes 1 discount point. She also said that she automatically gives rates with 1 discount point since the rates are high and also for us to use all of the 12500 closing credit. But the closing cost for the loan now is around 16500 including impounds. We know that she wants to make a big commission or the company wants to get the 12500 back in some other way.

The problem now is can we back out from purchasing the home because of this? We won't have enough money to pay for the closing cost if we use a different lender. We might have enough but we won't have anything left for moving expenses, refrigerator, washer/dryer, etc. (this is our first home).

Please advise. thanks. We are scheduled to close on Sept. 26.
Where is your buyer's agent? Are you even aware of buyer-agency?

While this is your account of events, I want to note that I wrote a blog about tactics that preferred lenders and builders use to manipulate loan costs, among other things.
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Old 09-01-2008, 02:20 PM
 
Location: Greenville County, SC
275 posts, read 1,545,798 times
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Based on your questions and the information you've given, the best advice you have received is to consult a real estate attorney. I have bought a few homes in California and have never needed an attorney, but in your case you need a professional to review your contract and the GFE so you receive competent advice.

Good Luck
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