I recently refinanced my house. I had been thinking about it and received a solicitation in the mail from a mortgage broker. I went ahead and called and it sounded good so I went ahead with it. There were several red flags but I was oblivious to them. I never received a Good Faith Estimate. He verbally gave me a rough estimate but that was it. I asked him for one about half way through and he said he would get one out to me. He warned me that I would get one from Countrywide (which is who they go through) but to just toss it. He said they send those out to everybody, they are just generic and not specific or even really relevant to my loan. The first time I saw the fees was when I was signing the final papers. I received the "borrowers estimated closing statement" with a couple thousand in fees including a 300.00 "pad". I went ahead and signed. In the past, I have always received the pad, usually along with some extra. When I didn't get anything I decided to compare the estimated costs with the actual costs I received later. I thought it odd that it would be exactly 300.00. Many things are worded slightly different so it's hard to be sure which is what but one thing for sure, there is an extra 250.00 charge for some sort of document fees, sounded very similar, just differently worded (I'll have to pull out the papers again to get the exact wording). I called the title company to ask about this. They had to pull my file out of storage and just called me back today. They said at the last minute Countrywide had them add these fees and they had no control over it. I asked if this was something I could fight and she said not really. If countrywide wants the money, they get the money. So.....finally....my question is.... Is this legal? Can they generate a whole new fee like that at the last minute? I'm going to call Countrywide but want to find out legally if they are allowed to do this.
Ok I found the paper. One of them is a "Lender Doc Fee" of 250.00. The other is a "Document Fees - ABC Financial" (not real name). I guess it could be that the broker charged me 250.00 & Countrywide charged me 250.00. My question is: #1: Why go through a broker if they just duplicate the fees? I would think they did the "work" for Countrywide..... #2: Doc fees seem pretty standard so why were they not put on the estimated closing statement? #3: Can Countrywide add fees at the last minute like that?
1 - i often wonder why people do too! 2 - they should be disclosed on the GFE except the broker fees, those tend to be added later. 3 - yes, but they must disclose them on the HUD/Settlement statement. I know your ticked so what i am about to say is probably not what you want to hear = but you really need to read the paperwork BEFOREHAND. don't trust banks/brokers, etc, to not make mistakes or change terms. and unfortunately once you sign you are bound.
I agree, but that last fee was NOT on the papers I signed. They did include a $300.00 "pad" since the other charges were estimates. AFTER I signed the papers, supposedly Countrywide told the title/escrow company to add another "document fees" charge of 250.00. I did not see this until I received the "Final Settlement Statement" or HUD-1 a week or so later. I had absolutely no way of knowing they were going to charge this fee.
When you signed your loan docs the HUD-1 was the final numbers that was with your loan docs. You should have gotten a copy at signing. In California you have a 3 day right to rescission. You take your paperwork home and look at it...if it isn't to your satisfaction that is the time to question. NOT AFTER! A good faith estimate is just that...an estimate. The Broker/Lender has 3 days to get that and a Truth in Lending statement after you have signed the loan application. If they don't send it to you "BIG RED FLAG"!! You have a right to know fees....that's not to say there aren't lenders/brokers out there that don't disclose everything up front. I try to be as accurate as possible. There are things we have no control over such as escrow, title and recording fees. We estimate those to the best of our knowledge. The Lender fees will vary as well...perhaps the Broker doesn't know where they are sending the loan yet and they estimate. Sounds like your broker used Countrywide often and he should have known of all their fees. As I stated before those numbers were on your HUD when you signed docs. That is escrow or titles responsibility to get the correct fees. Probably not what you wanted to hear....but, if you are only off $300 then you are doing ok. That's what the pad is for....and remember the estimated is only that...an estimate. We are not aware at the time that the estimate is produced what your exact payoffs are or if you have prepay or other penalties to pay. If indeed you have the HUD from your docs and the fees have changed...then you do have a beef. You need to go back to your Broker and give them a copy of your HUD and a copy of your Final and tell them that someone owes you $250. They CAN NOT change the fees after you have signed docs!!! Check your paperwork again...and go over it with your Broker...demand that it be returned to you. As Jenz stated...READ THE DOCS!!!! If you are in a state that has a rescission period.. USE IT!!! If you are in a "WET" state (where you fund at signing) take your time and get all the answers then!!! Make sure you have a good faith estimate and a truth in lending that is complete...if not, ASK FOR IT! You have a right to them. Brokers and Lenders will usually charge the same fees...if a Broker is charging "junk fees" such as doc fees, application fees, admin fees, etc....tell them you will not pay them. These are the only fees they have control over. You tell them you will pay origination (if you are paying points) and processing...but nothing else. If they want your business they will eat them...if not than go to someone that will play ball your way.
I received the estimate when I signed the papers. The final HUD-1 I received in the mail about a week or so later. I understand about the fees, they are just an estimate. Usually they do over-estimate on those anyway. I have almost always received more than my pad back. The fee I am speaking of is an entirely new fee. My recission period is over. Of course, I didn't find out about this added fee until well after the recission period. I guess that is why they did it the way they did. I have since done alot of research on the computer and found terrible horror stories about Countrywide. This is a common tactic that they have used. I guess I just paid 250.00 for a good lesson. Thanks for your input though. You're right, it's not what I was hoping to hear but I'm glad I heard it before I went and threw a hissy just to find out I had no leg to stand on.
now i am understanding it better. no, the one you sign at closing is FINAL. they CANNOT add fees after the fact.
Re: Re: Question for mortgage experts- fees CORRECT...you should have a copy that you signed with docs (you should have been given a copy) and compare it to the FINAL HUD...they should be the same. It CANNOT change!!! So check and give your Broker a call if it is and make them make it RIGHT!!!
Re: Re: Question for mortgage experts- fees Bottom line on the refi is 3 days to get the GFE, and I wouldn't even think about signing docs unless you had 24 hours to PREVIEW them ahead of time. I also wouldn't generalize junk fees as in my opinion many processing fees are "junk" fees. If you go to a broker and have to pay a 700 dollar "lender" or "underwriting" fee, then a processing fee AND the origination fee..........often times these fees are a lot higher then a Bankers origination and simple 250 or so Doc Prep fee. Those Lender fees...while not the BROKERS JUNK fees, are the WHOELSALE LENDER's Junk fees. I would consider looking at dollars and not wordage when looking at fees. Here's a booklet for ya to explain these fees on a GFE as well. Good Luck. Http://www.willtygart.com/HB.pdf ..
Re: Re: Re: Question for mortgage experts- fees Yes, I do have that copy, that is what I compared the final HUD-1 to and there is an additional fee of $250.00. I just want to be sure I have this straight though. The final HUD-1 with all the FINAL numbers on it I was supposed to receive a week or so after signing the FINAL docs, right? I wasn't supposed to get that at closing........ I never did receive any "Good Faith Estimate" so I'm not even comparing anything with that. I just want to clarify this last point before I contact the broker.
Re: Re: Re: Question for mortgage experts- fees What you SIGNED is the FINAL. Once you signed it, they can't change it. So the one you signed stands, and if they changed it later and mailed it to you, they owe you money. Closing is just that--CLOSING (or FINAL).
Re: Re: Re: Question for mortgage experts- fees Then is it common for it to have a "pad" in it? I know in the past they always had a pad built in also. Is this specific to California maybe? Then it goes to the 3 days right of recision thingy and then closes and I get my money. Then shortly after that I would get my pad back (in theory although I always used to). I think this is where I am getting confused. Everybody is saying that the numbers on the paper I signed were final but why would they include a pad then.......
Re: Re: Re: Question for mortgage experts- fees the pad..more or less is to cover the payoff of the loan you are refinancing. It all depends on the day the loan funds and it is to cover any interest that accrues during that timeframe. The pad usually comes in if you have made a payment to your original loan company and they have not adjusted the payoff amount to reflect your last payment. Either way the pad should not come in the form of doc fee, etc. I would contact your broker and countrywide and the local BB and tell them if they do not set this straight and get the money you are owed by what it sounds like you will report them, and it cost them much much more than to settle it up. hope that helps best of luck! BB AHMCC
