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Old 02-23-2009, 10:12 PM
596 posts, read 2,498,637 times
Reputation: 201


Can I toss out fees and see what you guys think of them? I dont know what I'm looking at for the most part...

Loan orig fee 2,650
appraisal fee 350
flood determination fee 12
app fee 250
attorney fee 550
title ins. fee 1060
recording fee 70
prepaid interest 1089
hazard ins. premium 996
hazard ins. 249
property tax 2616
hazard ins. 83
real estate taxes 327

I dont know why the hazard ins. is listed so many times. Two are under the heading estimated reserve/prepaid costs - one as "items required by lender to be paid in advance" and one as "reserves deposited with lender". The 3rd hazard ins. mentioned is under "total estimated monthly payment".

The interest rate is listed as 5% and the lo seemed to do alot of fast talking when this rate came up in our discussion. I just observed/listened b/c I wasnt sure what to say.

But the GFE is pretty much just a worthless piece of paper at this point, right? It doesnt necessarily mean anything? I never did get any preapproval letter, it was all just discussion. Does the GFE have anything to do with the preapproval or can anyone walk into a bank and ask for a GFE? (Daddys//M3 - you had mentioned that you usually do the preapprovals before the GFE...).

Please offer advise if you can on the GFE and anything else, could use it. For example, is anything negotiable? Can anything be lowered somehow? Do I have to pay all of these costs? Its such an ugly little piece of paper...

OH, and since our R.E. Agent didnt advise us that we could go for up to 3% of closing (in fact, she dissuaded us from asking for more b/c "we dont typically do that here - I dont know who told you people ask for that" and "usually the sellers and buyers each pay their own closing costs") we are amending the contract (is this bad or dangerous to losing a property we really want?) to roll the closing into the loan. We're increasing the loan amt and increasing the sellers closing contribution.
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Old 02-23-2009, 10:41 PM
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,104,457 times
Reputation: 952
Those seem in order. The hazard insurance is listed that many times because the insurance company will require a year's premium upfront, the lender will require about 3 months as reserves to build up your escrow account, and the third time is showing your monthly hazard insurance payment, which is why you taxes are showing up again. These will be included in your monthly payment. Of those charges the only thing I can see that is negotiable is the origination fee. However many LOs will not negotiate their origination fee as that is how we get paid (I personally would never negotiate my origination fee).

Although the GFE is just that, an estimate, there are laws requiring that if anything changes we absolutely must re-disclose asap, and also the HUD-1 settlement statement can only be a certain percentage off from the GFE. Because of this, many LOs will (or should at least) be very conservative and actually estimate to the high side on the numbers. That way if anything changes for the worse you are prepared for it and not surprised by it.

You can shop around. Any hard credit pulls (as long as they are mortgage related) within a 30 day period will count as 1 pull, so having other lenders pull your credit will not hurt your score so long as they are within that 30 day window. That being said, I'm sure that you could simply mention that you are shopping around for the best deal. DO NOT provide the competing lender with the GFE. It is unfortunately all to common for LOs to lowball based on the original GFE. Instead, let the other lenders compete on their own merit. That way you can be sure that you are not getting lowballed with the intention of a bait and switch.

As long as the seller's bottom line remains the same, I am sure that you should not have an issue amending the contract. The seller is simply concerned about that bottom line.
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Old 02-23-2009, 10:58 PM
596 posts, read 2,498,637 times
Reputation: 201
Since you mentioned that most lo's wont alter their origination fee, I'll shock you to tell you she gave us the fee at a 50% discount. I'm not sure why! Maybe she felt bad for not communicating with us for 3 weeks? I'm very appreciative.

If you think that this is a reasonable GFE, thats good to hear. You dont know me and you dont have to tell me your advise but you do so I feel comfortable assuming that you're being honest. Truthfully, as shamefully irresponsible as it may seem, I dont want to shop around (ah! who said that!) and the loan is very specific in its design so I dont think we'd get the same arrangement anywhere else.

Is a GFE as good as a preapproval letter, or is it entirely different and independant of the preapproval? I'm getting the feeling that at this stage of the game, we're past the preapproval letter and moving full steam ahead to the wizard of oz...er...the underwriter..."person" in the bowels of the bank?
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Old 02-23-2009, 11:43 PM
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,104,457 times
Reputation: 952
Out of curiosity, what is the purchase price of the home or the loan amount(if you don't mind of course)? Standard origination fees are 1% of the loan amount.

The GFE does seem reasonable. Of course things like title insurance vary from state to state and also some places are attorney closing states and some are title closing states so in NV we don't have closing attorneys. Again, the third party fees are what they are and it is illegal for a LO to upcharge so there should be no issue there.

Due to the very specific loan type it seems like shopping may not even be possible. That being said, 5% is a very good rate right now (government loans are in the mid 5% range and most conventionals are in the low 5% range as of today) and if the costs are in line with what is reasonable in your area then shopping may just complicate things.

The GFE and the preapproval letter are only as good as the LO that puts it together. Just like automated underwriting is only as good as the info that is uploaded. Some LOs will hand over a GFE or a preapproval/prequal letter to anyone. Others are more detailed in their work. Unfortunately because of this there is really no way that I could accurately tell you if the GFE means that you have some form of approval or what stage of the loan process you are in.
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Old 02-24-2009, 05:51 AM
596 posts, read 2,498,637 times
Reputation: 201
I sent you a pm.
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