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Old 03-08-2009, 02:19 PM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,098,953 times
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Quote:
Originally Posted by jctx View Post
Can anyone explain this to me? Can a seller be asked to pay a fee to get a lower percentage for a buyer??
Absolutely. Conventional loan programs allow the seller to contribute up to 3% towards the buyer's closing costs. Depending on how the contract is worded this may be applied to lender and title fees, points (origination and discount), and prepaids and reserves. FHA allows for 6% and VA allows 4%, although VA guidelines define seller concessions a bit differently.
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Old 03-08-2009, 03:39 PM
 
222 posts, read 778,247 times
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The way our contract was worded the seller is paying up to 3% in closing costs. I don't remember the exact wording but they are paying the closing costs and the "extra" is being used to buy down the interest rate. Because they needed the closing date further out from the beginning we had to extend our interest rate lock (with a fee) and the LO said that it could go towards that fee also.
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Old 03-09-2009, 12:43 AM
 
Location: San Jose (Willow Glen)
180 posts, read 626,781 times
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Quote:
Originally Posted by Bridget View Post
The way our contract was worded the seller is paying up to 3% in closing costs. I don't remember the exact wording but they are paying the closing costs and the "extra" is being used to buy down the interest rate. Because they needed the closing date further out from the beginning we had to extend our interest rate lock (with a fee) and the LO said that it could go towards that fee also.
Let me see if I understand you correctly. I'll put some easy numbers to it to try to clarify.

$1,000,000 purchase price with 3% ($30k) paid by seller for CC.

Let's say that if everything would have closed on time, you would have had $10k in closing costs, and the remaining $20k would have gone toward buying your rate down from 5.5% to 5.00%.

Now that you are having to extend the rate at a cost of, let's say, $2,500, you are only able to use $17.5k to buy down your rate, and now you are only able to get a 5.125%.

They should be paying for your lock extension, but that's not the real world.

What usually happens, depending on the market, is the party responsible for the delay asks for other party for an extension.

The other party can either grant the extension, or walk from the transaction for non performance. Oftentimes, the granting party will ask for some sort of concession from the delaying party (I've seen $100/day or Seller's prorated PITI if it's the buyer who is late).

Lot's of the escrow delays from the Seller side these days come from Bank REO properties and issues with getting clear title, or having the proper person sign the grant deed paperwork at the bank. I've had transactions go 15-20 days over and the bank basically gives you the big middle finger. They don't care if you walk, they will just resell it.
So, you basically just take it.

I've gotten into the habit of locking for 15 days beyond close of escrow on purchase transactions where they are buying from the bank.

Best of luck to you. Hang in there.
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Old 03-09-2009, 05:37 AM
 
95 posts, read 217,121 times
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Quote:
Originally Posted by AndrewSoss View Post

Lot's of the escrow delays from the Seller side these days come from Bank REO properties and issues with getting clear title, or having the proper person sign the grant deed paperwork at the bank. I've had transactions go 15-20 days over and the bank basically gives you the big middle finger. They don't care if you walk, they will just resell it.
So, you basically just take it.
What a way to do business, gotta luv it.


Quote:
Originally Posted by AndrewSoss View Post

Best of luck to you. Hang in there.
Indeed.
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Old 03-09-2009, 07:38 AM
 
8 posts, read 15,416 times
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Default Interest Rate

Quote:
Originally Posted by jctx View Post
Wow...how did you get that interest rate?!
Well, I'm relocating for a job...so my company is paying the 1% origination fee....which contributes to how low that rate is (4.675%). However, Wells Fargo did actually lower the interest rate AFTER we locked when they screwed up and had to change our down payment from 20% to 25%.....so complaining did get me something. I think they brought it down another .25% with the ranting and raving I did about their mistake. Never honestly expected to get anything from it and I was polite while I was expressing myself. Guess it paid off.
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Old 03-09-2009, 11:48 AM
 
222 posts, read 778,247 times
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Quote:
Originally Posted by julieca View Post
We had the same experience with Wells Fargo. Appraisal turned up a "declining market"......which has been declining for a long time now. But, Wells Fargo was apparantly *surprised* by this....they told us that the area we are buying on doesn't show up as declining on their list and the appraisal was the first information that they had that it was declining! They increased our down payment from 20% to 25% only after the appraisal came back and underwriting was subsequently completed.

Still waiting to close.......should happen soon (with 25% down)......hopefully there are no new issues for us.

Did they end up closing after your initial contract date? If so, you might be eligible for their loan guarantee refund. They will refund you your first payment of principal and interest. My realtor had someone else this happened to and they gave them the refund and I am going to request it since our original closing date should have been Friday. I would look into it, even though you mentioned they lowered your interest rate already.
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Old 03-10-2009, 10:27 PM
 
222 posts, read 778,247 times
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Still not closed. Our LO did get the down payment to be the 5% but he has now gone 3 days over our contract closing date. Today we went in at 4pm and when we got to the HUD's they were wrong and it was now after 5pm. This was after my husband called him the night before to verify he had all of the totals done correctly. Now we are going back at 9am tomorrow to finish signing. I am so done with Wells Fargo (I know it isn't the bank it is this LO, but he is giving them a horrible name).
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Old 03-12-2009, 05:15 AM
 
8 posts, read 15,416 times
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Quote:
Originally Posted by Bridget View Post
Did they end up closing after your initial contract date? If so, you might be eligible for their loan guarantee refund. They will refund you your first payment of principal and interest. My realtor had someone else this happened to and they gave them the refund and I am going to request it since our original closing date should have been Friday. I would look into it, even though you mentioned they lowered your interest rate already.
Our loan closing was not delayed by WF, it was delayed by the sellers......so this would not apply to us. You know what, I just looked at the loan documents again today and the rate was actually 4.625%....lower than the 4.675% that I had mentioned previously. As annoyed as I was by everything when it occurred, the rate reduction they gave us when I complained made us happy again. Of course, we would not feel the same way if it ended up destroying the entire deal.
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Old 03-12-2009, 05:17 AM
 
8 posts, read 15,416 times
Reputation: 10
Quote:
Originally Posted by Bridget View Post
Still not closed. Our LO did get the down payment to be the 5% but he has now gone 3 days over our contract closing date. Today we went in at 4pm and when we got to the HUD's they were wrong and it was now after 5pm. This was after my husband called him the night before to verify he had all of the totals done correctly. Now we are going back at 9am tomorrow to finish signing. I am so done with Wells Fargo (I know it isn't the bank it is this LO, but he is giving them a horrible name).
So sorry you are having trouble still. Great news that they got you back to 5%. I'm happy to hear you were successful with that. We actually had a pretty good loan officer......so even though all this ridiculous stuff occurred with the down payment %, I felt they more than made up for it with the rate reduction (which they suggested and I never asked for). I hope you get through this.........we closed a week ago now and it really feels like a distant memory already. Hope you can have the same experience.
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Old 03-12-2009, 06:52 AM
 
596 posts, read 2,495,190 times
Reputation: 201
Quote:
Originally Posted by julieca View Post
Well, I'm relocating for a job...so my company is paying the 1% origination fee....which contributes to how low that rate is (4.675%). However, Wells Fargo did actually lower the interest rate AFTER we locked when they screwed up and had to change our down payment from 20% to 25%.....so complaining did get me something. I think they brought it down another .25% with the ranting and raving I did about their mistake. Never honestly expected to get anything from it and I was polite while I was expressing myself. Guess it paid off.
Just curious about this bolded part. We are relocating as well and we've been given some examples of what we can get them to pay for, since they pay "relocation expenses", but when we have Qs about it, they have to be sent down to their compliance department. Do you happen to know what portion of a home purchase complies as an expense in this area? Somehow, if it isnt tax deductible for them (I think) then we can't expense it from their account. Anyhow with info on this, I would love to hear your thoughts. Now is the time for us to speak up on our requests and sending in bills to the appropriate department. Sooner the better, then it comes out of THEIR account directly and not as a reimbursement after us forking it out first. Thanks. (Also, the deadline is pretty strict...once we're moved, I think the opportunity to submit requests dies).
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