Club Chaos Agents - All Things Hollish, Wacked, and Jacked

Jeff, your government hard at work.  If they did this to the good faith estimate, wait until you see what they can do with healthcare.

Jeff: I read an interview with FHA Commissioner Stevens who commented on some of these objections. He just said that it wasn't inteded to be a comprehensive outline of all the loan terms but as a "shopping tool" where borrowers could compare apples to apples.

The funny thing is that with all the red tape and time restrictions, no borrower is going to be able to "shop around" and still meet their close of escrow. Once again we have good intentions with absolutely no transferability into the real world. Hey, that seems like the entire plight of our government! Okay, I'll stop now! ;-)

 

CRAIG.... .  always, and don't you love it?   In regards to health care, don't get me started.  I just wonder why so many try to over-regulate and miss some of the simple processes while making it more difficult than it is.

 

CARI.... . I would love to see this interview, could you please send it to me?  As for his comment that this should be a "shopping tool?"  I will say it here and now... I thought Mr. Stevens would bring something very good to HUD.. and that was the fact that he started as a loan officer, has been a manager, regional for a bank, and even helped out a real estate company. Yet, in my opinion, anyone with common sense and good knowledge should know that there are way too many loopholes that indicate that this new GFE can be an excellent shopping tool.

I will agree with your statement there isn't going to be enough time to shop around. But let's take it one step further... in order to properly shop, you need a GFE, right?  At least as what HUD as demonstrated with this NEW GFE, right?  The reason why this new GFE was redone.  So, no lender is giving out the New GFE until all 6 or 7 trigger points are hit, correct?  So when this happens, the borrower will be given tne new GFE.  My whole point is... who would do this over and over just to get multiple good faith estimates.  That means that people would be basically completing mortgage applications to shop.  So how does that help people shop?  And yes, I need to stop now, as you can see that I am worked up about this...  thanks for your input.

 

Jeff,   I hope you do not mine that I reuse this graphic here. 

 

My biggest issue with the New GFE is that HUD tells Borrowers to Compare "Total Estimater Settlement Charges" ( A & B ).   I believe item "A" is most important, because the total show in "B", should generally be identical from one lender to another.  You and I know that regardless of the lender chosen the Title Company fees, Transfer fees, Building of the Escrow Account and Home owners insurance costs should be nearly identical.  I advise my clients to look at this number to make sure it is being presented consistently by all lenders. 

 

 

 

 

 

 

Jeff, they did a really good job of protecting the consumer don't you think?  NOT! 

Governement needs to stay out of business.

Jeff - this is certainly good information to have. It has gotten too complicated and it does not fairly represent the situation for the consumer, who is the one who ought to be benefitting from this. The clarification is much needed. What next?

Jeff

Jeff, it takes me about 3 times longer to prepare the new good faith compared to the old one. The three biggest complaints I have is the following. 1. Full payment not disclosed 2. No signature. 3. Borrowers don't understand all the boxes. We need to go back to the one page line item per each fee form!!!

I think it would be a good idea for those who come up with these forms to consult with someone like yourself BEFORE they make these types of forms mandatory.

 

TIM.... . I totally agree and I was going to get into detail about that also... but I didn't feel like doing a part 3.  The only time everything is spelled out, when the costs are broken down, is at settlement.  How does that help people shop?  thanks

DAMON.... .  I think there are more than just you and I that will agree with your statement.  Many in gov't are just full of themselves and will do what they want without truly thinking.  thanks

JEFF,.... . not only complicated, but the time constraints will delay more settlements in the future. Way too many checks and balances that will even hurt a good settlement.

STEPHANIE... . it's just sad overall... not only longer time...  but most borrowers won't understand this and the sad part, many loan officers know this or don't understand it themselves... and this will hurt the borrower even more.   I agree about the one page... I always told borrowers to ignore the APR and just compare the fees on lines 801 to 820 and the rate.  And just make sure there wasn't anything funky with the title fees.

 

I sat in a 2 1/2 hour class on Wednesday regarding this and came away with more questions than answers.  How do we fix this mess?  Craig is right.  What could they do to health care?

I ran into more problems with the new gfe just this week. My buyer wanted to know why title was over $5000. It was all lumped together.

I still don't understand the purpose of the new GFE's, thanks for the update Jeff!  You are the best!

We've been given a lemon, let's make some lemonade!  As indecipherable as the new GFE is, it does kind of make us Realtors even MORE indispensable!  The average consumer needs us more than ever to help them through this more confusing maze of buying a home.

I love the "Acts of God." I can't wait to see one of these clear. Got any examples?

Jeff, I have taken a con-ed on this and we had a lender in to go over it.

I am starting to understand the 3 buckets.

I think we will all get use to it. We had 2 closings this week with it. They were fine, one I had last week, the lender messed up and had a 843.00 he had to pay.

 

I have an early appointment so I bookmarked this for closer review later in the day. I have an appointment for making an offer and just received the Personal Loan Quote from the lender. Does not look like an improvement for the client at all. Thanks for the post, Take care

It is a good thing to tell folks how much they will be paying for the loan.  It is a bad thing to present it in such a form as to confuse everyone and still make it possible for bad loan officers to abuse the forms.

Hi Jeff -- This post is another reason why it's imperative for a buyer to work with a loan officer they can trust and has detailed knowledge.

 

JOAN.... .  well, they didn't ask me... lol  Many of the loan officers that I have spoken to about this have question who they actually asked to review this.  I am not sure, but I heard through the grapevine that they had a number of loan officers test the New GFE and or review it like a beta testing thingy...  I wonder if they were all blind?  Sorry, but just so many holes in this one.

CAROL.... .  I am not here to put down realtors, but what kind of 2 1/2 hour class did you sit in on and why?  Was it put on by a lender?  I really truly believe that realtors need to just stay out of lending 100%.....  why is there a need to truly understand this?  Because if a borrower asks the realtor, many realtors would go on to explaining some things. Not saying that you would.... but any realtors answer, no matter what they think they would understand, should be... please ask your loan officer. Does the realtor even have the right to pre-qualify a borrower? Gee, even speak to them about any mortgage related info?  This is just my opinion, but I have never been more firm about this stance now than ever before.  So I am just wondering who out the 2 1/2 hour class on and why.  thanks

CHRISTINE.... .  what stinks is that there are 1 or 2 forms that the loan officer is required to give to the borrower.  When I send these, I go over it with them to show them the break down. Overall, I will see many loan officers that won't do this for several reasons.  These new forms are just going to create more confusion, even though the laws say that most things can't change once on the GFE.   I just think the gov't went over board with this.

JENNIFER.... .  the purpose?  The main focus was for the consumer to be able to shop properly and more effectively. They also wanted the borrower to be more aware of some things. But overall... I call it a cluster __________.   And thanks for that very polite compliment.

 

RICHARD.... . I am semi confused by your comment... you stated... "As indecipherable as the new GFE is, it does kind of make us Realtors even MORE indispensable!"

My personal opinion is that a realtor should stay completely out of the lending side of things, 110% out of it. Sorry, but I don't care what the realtor thinks they know.. it's bad enough when it comes from a loan officer and it's misleading.  The only answer a realtor should be giving to a borrower when asked about the new GFE or any mortgage related info is... Please speak to your loan officer... end of story. I might sound harsh...  but I have my reasons why. Just 3 weeks ago I had a realtor try and tell my borrower that they would be better off with a FHA loan than the USDA loan that I was putting them into.  I wrote this : Does the realtor even have the right to pre-qualify a borrower? Gee, even speak to them about any mortgage related info?  This is just my opinion, but I have never been more firm about this stance now than ever before.

Overall, I do thank you for stopping by...  but with the confusing mess of mortgages, the borrower should only be consulting a loan officer about it. That is just my opinion, but many good qualified loan officers that I speak to agree with me 100%.

 

JAY.... . I am confused...  you said.. "I can't wait to see one of these clear. Got any examples?"   Wait for what to clear?  And what kind of examples?   Sorry that I am confused and I would be glad to give any examples... but I just want to be on the same page.   thanks...

 

MISSY.... .  This is just my opinion, but why is a lender coming in and explaining the new GFE to realtors?  My stance on this is that the realtor should just be saying... "speak to your loan officer"...  the realtor in my opinion, even if they want to understand it, is to keep all opinions to themselves when speaking to a borrower. As you mentioned, the lender had to eat $843.00.  That is part of this whole problem though... I need to be exact on almost everything...  I should only need to be exact on my fees and very close to the rest. My theory about the lender that came into your office?  Just so they can be in front of you all.... so they can get business... and so you can say, our lender helped us with this.  Sorry for stressing on this... but I just think that realtors don't need to understand this enough to speak to the borrower about it. When at settlement, that is what you have the title clerk and or lawyer for... and everything is numbered to the "t" now...  and if the lender doesn't comply, they will be fined heavily....  just food for thought.  Thanks for stopping by stranger.

 

GEORGE.... .  You received a personal loan quote from the lender?  Was it on the new GFE form?  Another form that says good faith estimate?  But yes, I will agree... for the most part, I don't think it's an improvement.  thanks

 

Jeff - While I ALWAYS point a buyer to their lender for clear answers, it's also important, as a Realtor, to understand and be able to speak about ALL aspects of the transaction.  I'm not a lender, I'm not a home inspector, I'm not a plumber or electrician -- but I know enough about these topics to discuss them with my buyers WHILE ALWAYS POINTING THEM TO AN EXPERT IN THE FIELD!

If my only answer was, "ask your lender," I would not be doing my full job.  We as Realtors NEED to understand the new GFE, and be able to explain it.

If I promise not to way a word about the lending side of the transaction, will you promise not to say a word about the real estate side of the transaction?  The two sides are interrelated to the point it is impossible!

We are the government and we are here to help!! This does not benefit the consumer. It only makes it more confusing to them.

 

JEFF ..... .  I agree 110%... I think the old good faith estimate could have been tweaked a tad...   but I think they went over-board on this and to make the lender responsible for exact figures on everything?  Damn...  I get their point, but in my opinion, they went about it the wrong way. thanks

CHRIS.... .  that is so true, but even scarier because who does one trust?  I wrote about this last week. Trust - Find a trusted realtor or loan officer.  Who defines trust? -  It's only March and I have received more complete calls from borrowers that have been dealing with other lenders/loan officers and how they have not closed and or were not given certain forms to compare. I think this had made it worse in many cases....  I think it will get worse before it gets better.  That is just my opinion.. thanks

 

RICHARD.... .  Okay... understanding it for your purposes is okay... but I will stick to my guns here.  Going over it with your borrower, in my opinion, is just wrong, especially now more than ever before.  As a realtor, it is not your duty to speak to the borrower about all aspects of the transaction. I know what you mean though.. you want to be able to help them on all aspects. But you should not know about all of these topics to discuss any mortgage info. Sorry... but many loan officers don't even have a good handle on this. 

Let me ask you this... does NAR say that it's part of your job to know mortgages, so you can answer questions from borrowers?... that pertain to mortgages?  Do you know that it's illegal now in some states for anyone but a licensed loan officer to even go over mortgage specific info?

A borrower a few days ago asked me questions about the tax credit. I said.. "I know enough to get by, but you need to go to the web site and or speak to a tax accountant or CPA... "  She asked me again, and I gave the same answer. I do the same when they ask me real estate questions and then explain why I don't give them answers outside of mortgages. You know what Richard, so far this year... each one has acknowledged and understood why I won't and why I tell them to speak to their realtor about it.

Sorry, but this has nothing to do with the fact that you might be a nice person and that you love to help out. And it doesn't matter who gave you a class on Good Faith Estimates or anything else mortgage related. If you aren't a licensed loan officer, you should not be going over anything with that borrower and or answering questions. Why do you think the gov't has dropped the hammer in making all loan officers take the NMLS tests and the state tests?  And if they aren't nationally licensed, that they can't originate loans?   It's gotten serious.. and I am not knocking the many realtors that are super nice and super helpful...  but my stance is that they just need to say to the borrower... "as much as I would love to give you my thoughts and or opinions on this matter, you are best speaking to your loan officer."  A borrower that understands, will understand this.

Overall, we all need to stop making ourselves look like true experts, because we can wear so many hats.  A true expert will just give info, advice, and answers in their respective field... Yes, mortgages are part of real estate... but they aren't a realtors job.  thanks for your input and feedback.. and for coming back to this discussion.  I do appreciate it, even though I disagree with your stance.  thanks

 

Jeff - We'll have to agree to disagree!  I hear your points, however.  Let's look at this scenario under you thoughts about how we should do business:  First time home buyer has already talked to a lender.  The lender explains the FHA program, and why it might be best for the borrower.  The borrower comes to me with a pre-qualification and says they want to look at condos in a specific community (he most probably never brought this up with the lender).  Uh, oh.  I know that community well, and know that no FHA financing is approved because of the high rental to owner-occupied ratio. 

Reading your post, here is what a conversation might look like: 

Me:  "Mr. Buyer, I know enough about FHA loans to get by, but you need to talk to your lender before we go looking at XYZ Condo Community."

Buyer: "Why is that?"

Me:  "I am not a lender, so I am not qualified to answer that question.  Why don't we give your lender a call so he can explain it to you?"

============================================

In reality, I am more than qualified to explain to my client the way FHA loans and condo communities work.  But I always add, "You will want to talk to your lender about this, as he will be able to give you additional insight."

I trust and value the lenders I work with -- I couldn't do my job without you!  I'd be interested to hear what other Realtors think about this.

Of course, as a mortgage broker, I already knew this stuff...  But you did a terrific job of explaining it and illustrating it.  I'm going to forward this to a couple of LO's I know.

Jeff & Richard,

Our business is for a fact a business where information is going to come up from our clients that would be specific to each others specialty.  I think what we all need to do is be careful not to CROSS the LINE of the others.  This does not suggest that Richard can't say to a buyer ' That development is not FHA approved" and to suggest that he might have to say "I am not a lender, so I am not qualified to answer that question" is rediculous.  I am SURE that is not what JEff was suggesting - but to GO OVER and explain the GFE? I agree 200% with Jeff on that one.  Just like I would never pull comps and suggest to a buyer what price I suggest he make an offer!  I HAVE had that question posed to me and my exact words were "That is your realtors department and i don't want to step on his toes, so I suggest you call him and go over that information.  We will do an appraisal once the contracts are signed, and that is where we come in.

I have also had clients call me when they got their escrow papers and although I have knowledge about the documents I exlained that these were title and escrow documents and although I could probably answer their questions, I would not want to speak OUT OF LINE and they completely understood.

 

I just recently had a realtor try and talk to my buyer about the gfe and she did NOT know enough about it that if I didn't meet with the buyer and go over it, I could've lost the deal.   She didn't know that during my initial discussion I had with my buyer, we agreed to go with the LEAST about of fees with NO origination fee for 5.250% - and she told him she thought the current rate was 4.875%. Which of course I could offer and I gave him that choice when we talked. But just her getting involved at all with that discussion made him THINK he wasn't getting the best deal.  He actually told me all this AFTER i met with him and explained his options and went over the GFE line by line.  He actually said he almost canceled his appointment based on what his realtor told him!  And has has since referred his friend to me but NOT to her.  hmm  interesting huh?

Bottom line is WE ARE LIABLE for the Good Faith Estimate AND under the ETHICS LAW WE ARE LIABLE to do everything to offer the CORRECT program for that client.  I asked the question during my 20 hour SAFE ACT training - if the realtors were going to have to take any of these classes and they actually said word for word that " the realtors SHOULD NOT be discussing any of the MORTGAGE financial information because they are not licensed to do so.  And just like when we are asked LEGAL or TAX questions, we have to defer back to the lawyer or the CPA." The realtors will be required to do the same when it comes to the financing part."

So although I see Richards point on discussing SOME interchangable information like whether a development is FHA approved - they should not be SUGGESTING programs, quoting rates or EXPLAINING documents that are from anyone else but their own department.

Just my 2 cents!

 

 

 

SCOTT..... . it benefits the borrower in a few ways, but overall, it's just a bad form in my opinion.  I know have to point out a few different forms for the borrower to find the information that they need to know.  thanks

 

RICHARD.... .  I never truly liked the "agree to disagree" statement... lol  Sure, call me a rebel.  Seriously though, I will disagree still with the realtor answering mortgage related questions and informational pieces per se.  But in regards to your example..  I will agree with your example. You know why?  As a realtor, you should know what you are listing and or selling.  If you are listing condos, you should know if they are FHA approved. It's like a car sales person knowing the details about the car. Please don't confuse the issues of mortgages and if condos are FHA approved. Trust me, I know the point that you are making, but I think that was a 'not so good' example. 

On another note, when I speak to all of my borrowers, I ask them what kind of properties that they are interested in...  ie. Single Family Dwellings... townhouses, condos, duplexes... etc..  from that point on, I tell them, if the property or area that they are interested in, that is anything outside of a single family dwelling, to always check in with me prior to placing an offer. And I take it one step further.. I tell the borrower, that even if they are looking at single family houses, that if they hear the words PUD or association dues, that they need to call me on this. I stress that no property is safe until I know the address and or type of property.  That in my opinion is a very good loan officer and how they prepare their clients.

As far as your example?  Again, I feel that it's part of the realtors job to know the property, and to know what are FHA approved or not. That still doesn't give the realtor the right to discuss anything else. As you can see, my main argument is those realtors that want to go over the good faith estimate, or give their advice on what mortgage programs are good or bad, etc, etc.  Sorry, but no.  I guess my response to you would be, please don't confuse the issue here. I know your stance, and I will still disagree with how much a realtor should advise and not. FHA approved condos should be part of the realtors package and nothing more. A condo is real estate. Especially if you are listing the condos, as a realtor, you should know what kind of financing is allowed or not. Would you not agree with that?  That still doesn't make you a loan officer. In my opinion, it makes you an informed realtor based on what you are selling and or what your buyer is buying.  And not to give advice to say....  no, FHA loans are bad for you... or, FHA loans are better than USDA loans. Those types of answers should NEVER come from a realtor.  It does not matter how long you have been in real estate or how much you think you know.  Sorry, even though this is my opinion, there is way to much to stay on top of for any realtor to give any opinion on anything.  Giving advice about the type of condo and what financing is allowed, to me, is not stepping over the boundaries. So I will have to disagree with the example, because I feel that should be part of the realtors job.

As for what other realtors think about this topic. I know there will be many that will disagree with me.. and if those same people don't like me, disrespect me, and or wouldn't want to do business with me?  Oh well.... I won't lose sleep.  Let me ask you a question Richard...  would you go to a heart surgeon who only does brain surgery?  Sure, that person is a doctor and might have some thoughts, opinions, and knowledge... but would you still want to get your advice from that person?   I do thank you for your comments... and for your opinion.  thanks

 

 

Jeff: Thanks for this. I agree with you. The new GFE is confusing. I find it interesting that one of the realtors here goes over the GFE with his borrower. I recently had a deal where the realtor did this and it screwed up our relationship.  I say we both need to stay on each other's side of the fence. Regarding the new GFE, I think it benefits the consumer and the escrow closer. The consumer can't have rate and fees changed unless there's a changed circumstance. Before, an unscrupulous loan officer could just keep re-disclosing and the borrower might sign anyway just to get the deal done. The escrow closer can just sign the customer without as many hitches, especially if neither the loan officer or the realtor can be there. Regarding points and fees and the like, I never get in a competition over a few hundred bucks. It's not worth it and I've never won. Today I get to be on a panel with 74 in attendance all about RESPA. I'll probably have to post on this. Take care.

Jeff - Well, I'm just glad we're beginning to agree to agree, then!  Perhaps I didn't state my point upfront.  I would NEVER want to go over the GFE with a client -- that is truly the loan officer's job.  But, after that is done and the client has a routine question that is simple and clear cut?  Perhaps, just maybe, I'm ok with answering that.

I'm glad we agree on the condo/FHA loan issue.  So I'll pose one other one to you.  How about the HUD-1 at the closing table?  That has mortgage related items on it.  And many times, the loan officer is not at the table.  Your thoughts?

Colleen - Thanks for being the eloquent voice of reason!  A question for you.  Many times buyers see a Realtor before they see a loan officer (and, for the record, I always steer them to a loan officer before showing them properties!).  And if I know that the area they are looking in is on the USDA list, and that, from my untrained view point, they might be eligible for the program, would it be wrong to say, "There's a loan program administered by the USDA that might be appropriate for you.  I suggest you ask you loan officer about it when you meet him/her."?

Why don't they let Realtors design these crazy forms?!!!

 

MICHAEL.... .aka Arizona Home Loans .... comment # 25.. .  thanks for the polite compliments.. and I would love to hear what the other loan officers had to say about this.  thanks

 

COLLEEN.... .  thanks for your input.  I agree with you in regards to what Richard has been saying, and that it is crossing the line on many issues when realtors give mortgage related advice.  And that a realtor explaining to the borrower about the condos, if they were FHA approved or not, is okay... and that I firmly believe that a realtor should at least know this much, since real estate is property related. Anything outside of that, in my opinion, would be against all of my other beliefs.

Colleen... you stated this.. "I asked the question during my 20 hour SAFE ACT training - if the realtors were going to have to take any of these classes and they actually said word for word that " the realtors SHOULD NOT be discussing any of the MORTGAGE financial information because they are not licensed to do so."

That is the point that I have been trying to make in my last several posts.  This is not about the realtor wanting to help out, be nice, and so much more.. it's now illegal and or wrong on so many levels.

On another note, when realtors tell borrowers that their rate is too high, or that there are lower rates, etc, etc... should not be discussed. Why?  Because there are way to many variables such as credit scores followed by LTV's and or debt-to-income ratios.  But that is a whole other subject.  Thanks for your input.

 

PAUL... .  I am going to agree for the most part... but as far as not allowing things to change?  Things happen... credit scores can change and such.  I thought it was great when the gov't came out with the MDIA act.  I thought this gave ample time to when things changed and by how much. Do you realize that we as loan officers are now responsible most things listed on the GFE?  Even to cover such fees as the intangible taxes, doc stamps, and other costs. Yes, we should be responsible to put a true cost on the GFE, but to have ZERO tolerance? No room for error on something that is handled by the title company and my closer?  Just my opinion on this...  And thanks for the polite comments.

 

 

RICHARD... comment # 29.... . I have no problem with the condo issue. In my opinion, I think that would be a no brainer. Realtors should know what they are listing and or what their buyers are buying.

In regards to this question that you had asked me... "How about the HUD-1 at the closing table?  That has mortgage related items on it.  And many times, the loan officer is not at the table.  Your thoughts?"

My answer...  I do have a problem with a realtor going over the HUD...  but... if they want to just read it word for word or number for number.. okay, fine.  But when the borrower then has a question about such item?   The realtor should be like... call your loan officer.  Here is my reasoning to this.

Borrower - "I am paying 2 points for my 5% rate, is this good?"  

Realtor - "I really can't answer that for you.  Why not call your loan officer now."

 

Here is my reasoning to that.  You might see rates advertised or your favorite loan officer tell you that rates are in the high 4's or low 5's.  That is fabulous... but there are way too many variables that can affect interest rates.

• credit scores

• loan amounts - yes, a $100,000 loan amount will have more points than a $300,000 loan amount. It has to do with the profit margin.
  

• debt-to-income ratios - some programs with back-end ratios over 50% have pricing penalties by some investors.

• LTV - loan to values - this definitely happens with conventional loans... and the less down and dependent on credit scores, the more points one might have to pay.

My whole point... a realtor just can't give reason to why some things are on the GFE...  they shoud do nothing more than go line by line.  That is why a settlement clerk is there, or an escrow officer, etc, etc... or lawyers. And some of these people by law can't give opinion on many different items.  All they can do is explain what each item is, yet offer no opinion if good or bad.

 

In regards to your question to Colleen?  I have no problem with what you said here..."There's a loan program administered by the USDA that might be appropriate for you.  I suggest you ask you loan officer about it when you meet him/her."?"

Anything other than making a suggestion, in my opinion, is wrong.  My example on this?  Realtor - "your loan officer has you qualified for a USDA loan. You are better off with FHA loans because..... "  Yes, this just happened to me and this is wrong. The realtor is not qualified to give this opinion, because they don't know the borrowers circumstances 100%.

Overall, thanks for your input and feedback again.  As you can see, I think it's a very fine line and what realtors should be allowed to do when it comes to mortgages. My other point, nationally and in many states, it is becoming illegal on what realtors can say and or do, unless licensed as a loan originator. So that part is not even my opinion now. thanks

 

Jeff:

The class was put on by our in-house lender.  It was mandatory training for agents in our office so that we could understand GFE's and what the changes are.  I try to stay out of the lending area as much as possible.  I do not work as a tour guide so I have my lenders' prequalify anyone I work with.  However, having a good understanding of the mortgage process is essential in providing quality service to my clients.

Jeff,

 

Great Post.  I also have been struggling with this new form even after taking three classes and recently getting licensed in AZ as a mortgage originator.  The form takes a lot of practice and is still confusing.  We have processors and closers double checking our work and still then making their own mistakes.  I am sure eventually I will master this form, but even solid mortgage professionals are struggling.

Richard,

One thing I wanted to point out just as an FYI.  Be very careful these days about how deep you go into details about the mortgage loan.  AZ has some very strong language now about how this information about a mortgage loan has to be advantageous to the borrower.  So if this advice is given from a real estate agent and that loan option was not the most advantageous,  then the law may have been broken.  The point I am trying to make is that now just being a helpful agent might mean you are actually breaking laws once these new rules start in July, 2010.  I am still curious if agents E and O insurance will need to be re-written in AZ to protect them about these issues.

Again great information Jeff,  Thanks for sharing.

Jeff

Cari in comment number two almost made me fall off my chair.

With all the hoopla, fanfair, and countless months of meeting and rewrites that HUD conducted to come up with this, and for the HUD Secretary to make that comment.

Would love to read that article she was talking about.

HUD has no clue what it's like to be working in the trenches.

Thanks for the post

I have to agree with the comments about government consulting with people actually in the business prior to making such changes -

 

PAM.. comment # 30... .  I think I will plead the 5th on that comment. 

 

CAROL... .  I am not sure that it should have been mandatory training. Look, I know realtors and management wants everyone to know what is going on. But by having mandatory training, what are you telling the realtors?  In my opinion?  Hey realtors, get to know this, you might be asked questions.. or, get to know this so you can help your borrowers out. For whatever the reason, do you yourself honestly think that you should learn the new good faith estimate?  And if you answered yes, please tell me in your own words to why you think this should take place and or be mandatory.

Now, I just asked the questions for input... nothing to say who is right and or wrong. You stated this... "However, having a good understanding of the mortgage process is essential in providing quality service to my clients."

Okay, understanding the process... but if a borrower were to ask you a question about the process?  What would you say then? I guess the problem that I am having with all of this is for the fact that I don't answer real estate questions.  In my opinion, understanding the mortgage process, that one should take a loan application, is different than knowing how the good faith estimate works.  ... and then trying to explain it to the borrower. And yes, realtors will take this upon themselves to talk to the borrower about this. Hence why I am semi opposed to these mandatory classes for realtors. What are we then telling the realtor?  That it's open duck season? Again, just my thoughts...

 

GARY.... . thanks for bringing this up.  I think this is more serious than what so many realize... people are clamping down to where almost any advice other than a licensed loan originator can be against the law.. at least in several states.  And I think this will spread like wild fire soon.  Overall.. I know your thoughts on this... but sorry realtors, there shouldn't be much that you should be advising on when it comes to mortgages. As the first example that Richard game, I think that is as far as it should go.

Thor Funding aka WAYNE.... . Cari is pretty much spot on with her comment. This new GFE was to help borrowers shop better.... but it will be harder in my opinion and in many cases tough to shop correctly unless you take an application. Many loan officers prior to this probably aren't showing the correct documents to even have a chance to shop. Here is the article that Cari is talking about. I have not had the chance to read this as of yet.  Article with Steven's comments.

BARBARA... comment # 36 ... .  well, the gov't apparently did consult with some people prior to these changes. The problem with all of this is... who did they consult with?  lol  thanks

 

I had an offer with a GFE attached to it as my sellers were asked to pay for closing costs.  I have never seen anything as wild as this new GFE and so, I reached out to you for info.  It's not my job to analyze these but when the seller is asked to pay for closing costs and I am seeing close to $3K just for underwriting, doc prep, and review ... that seems a little wild.  I just want someone I can trust in the lending field to help my sellers understand and from the response I got from the lender, the fees were way out of whack and it had nothing to do with the rate, etc. 

I believe when a Realtor has a team of professionals, that they should let them do their jobs.  When I see a contract with a GFE flying at me for seller paid closing costs and I can't understand, that's where the professionals like you come into place.

We asked for a revised GFE that matches my lenders GFE or they can pay the difference or work with my lender/servicing partner.  The buyer has options, even to walk away.

BTW, thanks for your help!

Nice post today thanks for getting it out to us...

Patricia/Seacoast NH

Jeff- I understand the new GFE was established to protect the consumer. Do you think the new GFE is any easier for the consumer to understand than the old one?

Richard,

You asked if mentioning a USDA program (If and when it's available) to a client is ok.  I would say absolutely.  You have knowledge that the area or property would fit a certain program and defer back to their loan originator.  If their loan originator is unfamiliar or does not offer it (which hopefully won't be the case now that the SAFE act is getting rid of those peeps) - then I believe you WOULD be doing your client a great service by sending them to someone who is and hopefully the client would qualify for the program.

 

Pam,  I'm assuming you are talking about...... them letting REALTORS and people actually in the business day to day designing their forms and the mortgage officers designing their own?  Not realtors designing mortgage forms.....lol

Trust me when I say I could've easily tweaked a CALYX POINT GFE and made it uniform to all  on one form EASILY understood by everyone.....I would LOVE to know who actually designed this rediculous...more confusing to the client crap!

 

BARB.... .  well, curious question. You said that you saw $3,000 in fees for such items as underwriting, doc prep, and review. Curious.. where did you see this?  This would not appear on the new good faith estimate.  You would have to be given a form called the Itemization Fee Worksheet or something that resembles the old GFE.  But yes, I would say anything over $500 to $1,000 is a lot of money.  But then again, those are very close to normal fees because of the cost of doing mortgages.  But it all comes down to if there are points being charged or not also.  On another note, I hope Larry can help out some.  thanks for your feedback.

PATRICIA.... . my pleasure and thanks for the compliment.. and for stopping by.

CRAIG... . here is how I look at it... yes, the New GFE is easier because it is condensed.  You have Box A and B.. and the total.  People can see the total, but as I pointed out, you don't know 100% what you are paying for in Box A, because there is no break down on the new GFE for this box.  For Box B, those fees are separated...  but from what I know and see, only a small portion of the New GFE is good.. and that was the part that I pointed out above.  "the summary of the loan" section is a good thing...  thanks

 

COLLEEN.... .  I agree also, that I have no problem with a realtor mentioning certain programs, especially if they know that they are used often in their local market area. What I dislike is when a realtor tells a borrower which loan is better than the other.  They have no right, when they don't know anything and everything about a client.  I already have problems when loan officers direct a borrower away from a specific loan program, just because they aren't familiar with it or that they don't offer that program. I have had this happen to at least 5 borrowers in the past, that I know of. Hell, once I had a female client with 10% down, who spent 3 months of active duty in Iraq, who was told she was better off going with a conventional mortgage.  And this was told to her by 2 different loan officers.... and I had to prove it to her with good faith estimate comparisons.  I found out one of the lenders didn't even do VA loans.  But both told this borrower that they did the numbers... but never showed her the comparisons.  My whole point to this?  I just had a realtor tell a borrower of mine that they were better off with a FHA mortgage, than the USDA loan that I am giving them. Realtors should NEVER give that kind of advice.  thanks for your feedback.

 

Hi Jeff, thanks for explaining it - apparently not everyone in the lending world understands it - I really don't see where it is helping buyers.

I have a buyer whose escrow on a foreclosure property was supposed to close on March 5, USDA loan, Chase Bank.

Chase approved it, USDA approved it, the loan is now spinning around in Chase Bank's new Compliance department - somebody is not sure about something on the GFE.

Meantime, my buyers will be charged $50 per diem late fee.

Great write up.  Of course... it seems like there are a buncvh of people writing forms that don't really know what they are doing...  Is it me?

I think all the new forms have issues.  I don't think they thought the forms all the way through.  

Jeff your level of contempt for Realtors is palpable. Did you have a bad experience or two? Do you not have a group of trusted and reliable Realtors who you work with? Client service in financial and real estate services is a highly collaborative process where cross-education is necessary and desirable to achieve the highest level of customer service. Chinese walls are rapidly being dismantled by the virtually viral dissemination of information on the Internet. If you feel you need to protect your territory by being the one and only dispenser of accurate information, you're moving down the right path. But frankly you sound like the Realtors a few years ago who insisted that buyers and sellers not get their own education and information off the Internet.

 

VIRGINIA... .  it can in some ways, bit overall, it will hurt buyers in my opinion.  And as in your case, it is delaying a settlement.  But it the ducks were all in a row, it should only be delayed for a day. I wonder if there is something wrong.  I think the MDIA law/act was good enough. But no, they had to take it a step further.  I guess time will tell to see if there will be any changes for the good and not what it is now. thanks and good luck with that closing.

LANE.... . you aren't the only one that thinks that. You wonder if they just flip for it, heads or tails, so many times.  And thanks for the compliment.

RUSS.... .  well, you think they would be smart enough to do this, but I guess not. At least have some of us in the deep trenches review these forms. Those that sit on capital hill and have no clue, should not be guessing at this.  thanks

 

Thanks for the update Jeff. Always look forward to all the great information you post for us

 

LESLIE... . sorry that I am so blunt and direct. .. yes, I do have some realtors that I work closely with, and those same realtors just say..."speak to jeff"... even some loan officers that I know of, that send me deals in states that they aren't licensed in, say the same.  In my opinion, I think your thought process of how this should all work would be for those people that can handle different jobs within the organization.  Yes, I do believe in the team concept....  but when it comes to mortgages, you refer all questions to that trusted loan officer. Even if someone taught you, as the realtor, what the GFE is all about, you should still not give any advice to the borrower.  Sorry, I take this very seriously... and yes, I have had some bad experiences. I know realtors have had bad experiences with loan officers also... but let me share a few with you.. it's very simple.

I had a realtor a few weeks ago tell a client of mine that FHA loans were better than USDA loans, after I sent her a pre-qual letter saying that these buyers were pre-qualified for a USDA loan.  She then went a step further to say that her loan officer agreed with her and stated the same thing. 2 problems with that.  First off, the realtor should have not made that statement, no matter what kind of experiences that she had with USDA loans.  Just because she had an opinion or maybe had a few bad experiences with them in the past, doesn't make her an expert and for the fact that she should be giving that kind of advice. Secondly, the loan officer?  Sorry, but he should be shot for giving an answer like that, when he had never even spoken to these buyers.

I had a borrower that called me about a month ago, who had some collection accounts, one of which was for $10,000.  These borrowers told me that they were qualified by another loan officer and that they didn't have to pay this account off by settlement.. I started to ask them about this one large collection account and said that this will not happen, because of their lack of credit and because of a few other reasons.  I then proceeded to get to the bottom of this and said... so the loan officer actually told you not to pay this off?  She said..."no, the realtor said it should not be a problem and not to worry about it, that they had a good reason for it.,"  Rut row...  they never spoke to the loan officer about this one collection account... but that the realtor said it should not be a problem, because they had spoken to the loan officer themselves. Sorry... but the realtor should have never stepped in. Well, you know what.. they still never closed as of yet.  The lender came back saying that this collection account had to be paid off.

I have a lot more examples.  Here is the problem that I see....  many realtors are very nice people and just want to help.  But when it comes to the financing questions, even if they know the answers, they should refer to the loan officer, no matter what. Sorry if that sounds harsh... but when I am asked a real estate question, I tell the borrower to go speak with their realtor.  If they tell me that the realtor doesn't know or that they have a bad feeling, etc, etc.. I tell them to speak to a real estate attorney, or that agents broker, or to find another agent.

You made this statement... "If you feel you need to protect your territory by being the one and only dispenser of accurate information, you're moving down the right path. But frankly you sound like the Realtors a few years ago who insisted that buyers and sellers not get their own education and information off the Internet."

First things first.. I don't know everything and I am not perfect....  I feel I need to protect the mortgage territory, all things about mortgages. I deal with this stuff every day. Realtors can't do both their job and the job of the loan officer.  Why do you think they are going to a national licensing requirement, and that most states are even having each loan officer take their own tests also.  Why do you think realtors have continuing education? 

Overall... sorry... but a realtor should do their job and a loan officer should focus on mortgages. I might sound like I am full of myself and that I have appointed myself as the Mortgage Guru... I am far from it, but I do know my stuff. Again, I don't know it all... but I do think that I know more than many... and if this ticks realtors off, on how I have commented against some realtors, well, at least I am giving accurate information based on dealing with this daily.  Don't get me wrong, I do believe in the team concept.  But I don't want realtors giving mortgage advice... I think it's that simple.  And so many realtors have given the wrong advice and or opinion in the past. And it's harder than ever before.. so they should continue? 

As far as your last statement...  that I sound like the realtors from a few years ago, that people should not get their information from the internet?  lol   I get over 80% of my clients from the internet, in the last 4 years. More than ever before because people do see knowledgeable professionals online.  What scares me is the bad information that is found online.  And yes, I know... I am a part of a group of 7 other loan officers, from different states, that we have about 120+ years of collective experience in mortgages.  That is close to an average of 15 years per person.   My point to this?  We have a 1 hour conference call once a week and talk about stuff like this.  We are seeing more and more realtors give bad advice in regards to mortgages and or refer bad loan officers.  These thoughts and or opinions are not just from myself, but from many other professional loan officers that have been around the block.

One more thing Leslie... I feel the same way about many loan officers also... so it's just not realtors. I might sound like I am on my high horse.. and maybe I am... but I take a lot of pride in what I do and making sure I give out very accurate information. I consider myself to be extremely knowledgable, that I am very creative, a problem solver, passionate in what I do... that I tell the client upfront what should be told and not what I think they want to hear, that I communicate very quickly and easily... and yes, that I am just tired of some realtors that try and handle the job of a loan officer.

As you stated, collaborative process where cross-education is necessary, in order to achieve the highest level of customer service.  Leslie... that was dandy 5 years ago... but it's even more complicated now than ever before. And unless the realtor does mortgages daily, to see so many different kinds of examples.. that realtor should just turn to the borrower and say..."I could give you an idea, but you are best talking to your loan officer."  And Leslie... if you don't think the loan officer gave the right answer, you just say, why not speak to mine or to another one. Would you go to a heart surgeon when needing brain surgery?  Just because they are a doctor?   Hey, I never expect everyone to ever agree with me.. and I know this is long... and maybe not politically correct... but that is another point. I don't pretend to be a politician. I just shoot straight from the hip and I will tend to ruffle some feathers.  I will say it again... in my opinion, my firm belief, realtors... no matter what, should not be giving advice and or opinions in regards to mortgages, if a borrower asks them for help.  You might be a great person, one who loves to help.  It's bad enough when a loan officer screws up a mortgage. But are you telling me that you want to take that chance yourself?... in giving some bad information?  Here is another one...  I had a realtor tell a borrower something based on what they heard from a loan officer... and it was 110% wrong, incorrect.  So now what... you told a borrower something, that you thought was correct, because you trusted a loan officer?  It happens... why even take that risk. We are talking about one of the biggest investments in a person's lifetime.  There needs to be a line that should not be crossed, no matter how nice you might be.  read some of the other comments from a few other loan officers. I don't seem to be the only one that thinks this way.

In any case, I do thank you for your input and feedback. I will say this... I will not get a long with everyone... not everyone will like me. Some thing I am stand offish...  a know-it-all...  all I can say is that I do know my stuff.  I am proud to say this and take pride in it. But I do not know it all.. and if I don't, I know who to ask and when.  thanks  PS... I am not going to go back and read this over again... it's late. So if some of this is not written well, I apoligize in advance. thanks

 

Jeff,  Just wanted to pop back in to say following this post has been quite interesting. 

I believe in your post you said that you use discount points instead of Origination Fees, underwriting, processing and other misc charges to allow borrowers the opportunity to gain the tax advantage of discount points.  I do like that idea or technique.  My understanding is that Discount Points are only tax deductable when used to buy down an interest rate provided they are used for that purpose.  The other fees (Origination, Processing and Underwriting) do not qualify as the deduction.  Have your buyers had any issues with their tax preparers?

Another issue I wanted to chime in about is the realtors involvement in the mortgage process and pricing.  I have seen too many Realtors and Sellers object to reasonable requests for Closing Cost assistance by reducing it, instead of just countering with a higher sales price.  I have also seen some Realtors steer buyers to their inhouse(affiliated) lender by saying XYZ lenders closing costs are too high or the Realtors inhouse lender would save the borrower money with lower closing costs.  In fact, provided the Closing costs are reasonable for the Rate quoted to the borrower, steer the borrower to a higher rate on the loan is not always in the buyers best interest.  I suspect you know what I mean and have seen cases where the price difference is .50 Points for a .25% rate difference.  You and I know that Closing Costs and the Rate of Interest on a loan need to go hand in hand.   Looking solely at one is not in a buyers best interest. 

Jeff, this is your post, but Tim has a point on upping the price for closing costs.  Yet, I have this home where Mom was a senior, basically lived off of tea bags and crackers because money was tight.  She made it through the depression where food was cut back to survive.  Today's market doesn't have the same resolutions as utilities and real estate taxes, medical are out of this world.  to have an unrealistic offer come in where there are all new mechanicals, new windows, new kitchen, but the electrical needs to be updated and the estate will pay for that but then the buyer asks for 200 Amps when the home has more then enough power with 100 Amps in this small two bedroom brick ranch. 

The only time I get involved is when I hear the story that Mom made sacrifices and then someone waltzes in with a low ball offer on a house that just went on the market, that is on an oversized lot, well maintained, with the exception of electric, and then wants the sun, the moon and the stars.  The closing costs were high with points.  I represent my clients interests and my team of professionals protects my clients interests.  I, as the listing agent, will always reach out to a mortgage professional, like Jeff, who can direct me or help me.  We are countering a revised GFE under the VA program, same rate, same terms, minus some wild junk fees. 

On another file, I saw 3 points (not discount), a rate that 1.5% higher then the marketplace for the worst credit score and yes, I jumped in and had a professional mortgage person call the buyer's agent and explain to them that these fees are high and out of place, once the mortgage person recognized that someone was taking that buyer for a ride. 

A good Realtor will step in because we are tired of the overpricing that some unprofessional mortgage people who are doing this on the side, are taking advantage of their friends or consumers.  It will only lead to more problems down the road.  I believe all of us are tired of it.  That is why and while I know it takes the time of someone on my team of professionals to try to get this consumer protected, I hope the people on my team don't walk away and get tired because of some of these issues.  I believe a good many want to be fair in our practice and business and a good many of us want to protect the consumer.  And yes, there are Realtors who don't have a team of professionals and start talking about .25 or .50 differential on the rate when at times the service is much better, the hair doesn't gray as fast, the time spent is much less and more selling can be done as a direct result of hiring a lender who is worth their weight in CLOSED.

Sorry for the interruption but this is a great post, Jeff!

 

ROLAND... . my pleasure and thanks for those kind compliments.

 

 

TIM.... .  I actually have used both origination fees and discount points over fees such as underwriting, processing, doc prep fees, etc, etc.  Origination fees are points and can be written off. But now, with the new HUD changes of last year, all points are origination fees. So all my FHA loans will be Origination fees and all Conventional loans will be discount points. In either case, a percentage of them can be written off on tax returns.

As far as your statement about such discount points can only be written off if they bought down the rate?  I have never heard of that one and never heard of anyone having a problem with this.  Besides, how would one know if the discount points paid bought down such rate? Think about it... how could one tell?  In my opinion, the only one that would know would be the loan officer, because you have the pricing sheet in hand. How could anyone tell if it was pure profit or that it bought the rate down.

In regards to your other issue, about realtors when they chime in and tell the borrower that the other lender was expensive and such. Yes, I hate this also.  First off, I tell many, I will not be the cheapest... but they will get excellent service, a good deal, not the best, and someone that is knowledgeable and who will tell them everything upfront and educate them about the process. Besides, I won't be expensive either.  Sure, if someone looks like they are way over-charging... but again, how does one know all of the time?  With credit score hits, on some loans, LTV pricing hits, and in some cases, some times pricing hits on high debt-to-income ratios.  In many case, I just think it's a poor excuse for the realtor to just get the borrower with their loan officer. And who is to say that they are any better, just because they said so. I could have this argument all day.

One last thing to argue my last two sentences...   I was referred to a borrower from a realtor on AR, who knew that I closed a few loans for another realtor on here.  She had told me that she uses two other loan officers and has been using them for the last 2 years... that they are great with pricing and get loans closed. Hey, that is great... every realtor should love that and every client should be happy, right?  Well, I was the 3rd loan officer of hers to speak to these borrowers.  This borrower liked me because I was always there, available, and educated him on some issues. He didn't feel comfortable with one loan officer and the other one?  He was literally 1/4% higher in rate and about $1,000 more on a 30 yr fixed rate. It was with a national lender, Wells Fargo. But the borrower wanted me to quote him on a 5/1 arm also.  I found out that this other lender, who I beat on a 30 yur fixed, was literally 3/8% lower than me on the 5/1 arm. I said no way...  so I waited 2 days after the quote and called the client back... told him that he could call me up until 9 pm on Sunday night.  He called me at 7 pm and we spoke for an hour.  The funny thing... this borrower was never explained on how a 5/1 arm worked... the index, the margin, what it would be as the worse case in 5 years, etc, etc.  I also went over his goals based on a 5 yr...  this person thought he could refinance in less than 5 yrs to get rid of the monthly mortgage insurance, if he had 20% or more equity. I said not on a FHA mortgage, which is what he was doing.  He said why not?  I explained to him why, which the other loan officer never talked to him about.

My whole point, I took the time to get in depth with this borrowers goals, what his plans were and why a 5/1 arm.. and to go over some possible financing programs in the next 5 years. He said he learned so much to make an educated decision. Yet he stayed with the current loan officer because his rate was so much better. I knew that he was slightly baiting this guy, because this guy wanted the 5/1, because his payment was $150 less a month. But he had not locked in.. gee, I wonder why.  Well, for 4 days in a row, rates got lower... I was now 1/8% higher and the other loan officer never lowered his rate on the 5/1 arm.. and the borrower didn't want to fill out another application.  I lost... but I lost because the loan officer played the market and it turned in his favor. Yet this borrower was never fully educated. This is the problem that I have with realtors, thinking that their person or persons are the best, all based on rates and that loans closed. Here is a great example that service stopped at the rate...

 

 

BARB.... . I understand where you are coming from... and please read my comment to Tim above.  Please start with the part that says... In regards to your other issue   ... I think I even talked about a lot of what you had mentioned.  I know realtors want to protect their borrowers in many cases... but I think in several cases, assumptions are made, even on the loan officers part, just based on some facts. And sorry, but some clients files take a lot of work, on top of myself always being available and such... and that kind of file does not demand a flat fee or a low cost loan. So many services try and sell flat fee services, even with mortgages. All rates and such are low balled based on this. Hence why I will be a tad higher to cover what I mentioned above. I need to start a little high and then I work my way down. I would rather be higher at first and then be lower. Too many start low to get the deal and in many cases, many will end up higher. Sure, you have some that are just ridiculously high to begin with. I understand this. I just got a client from one of my blogs about 2 weeks ago, who was getting 5.5% and was being charged 1.5 pts and a $4,000 commitment fee. Yes, that just sounds way to high. But loan amounts need to be known in order to make that judgment call, because all lenders have a profit margin. This was on a 400k loan... so yes, this was extremely high. I was able to give her 5.0% with 1 pt and no fees.  She basically saved $6,000 with me and got a rate 1/2% lower.  In any case, I just think realtors need to be careful when jumping into a file and assuming that the other loan officer is charging too much.  Just my opinion based on past experiences.. thanks for your input and thanks for the polite compliments.  I am glad I was able to help.  thanks

 

Barb,  I believe my post struck a nerve with you.  That was not my intent.  First let me say that I do believe that there are some unprofessional mortgage loan officers that overcharge consumers as well as unprofessional realtors that refer buyers to them.  Based upon you posts here, I do not believe for even one second that you fall into that catigory.  In your post, you started with me saying "up the sales price" instead of "Reducing Closing Costs Assistance". Fundamentally, I believe the Listing Agents responsibility is to get the BEST NET OFFER for your seller.   If you cross the line on interfere with the Buyers Agent, I believe you would be crossing a line that many others would object.  I would support a discussion with the Buyers Agent with regard to the amount of Closing Cost Assistance being requested to determine what would be in the best interest of getting a offer accepted.  That I believe is the goal of everyone. 

Too many times, I have heard of a seller is objecting to the assistance requested because "WHEN THEY PURCHASED THE HOME NO ONE ASSISTED THEM".   Again, I believe the BEST NET OFFER for everyone is the goal.   In your comment about my comments, you mention LOW BALL OFFER.   That, in my opinion should be your concern.   The amount of assistance requested should be the concern of the Buyers Agent and a discussion with them might be appropriate before your seller counters the offer. 

Perhaps your comment put a bug in my craw as much as mine did yours.  Thinking of cases where realtors have encouraged the buyer to take a higher rate because the realtor "DID NOT BELIEVE" points should be paid.  I am not talking about 2 or 3 points, I am talking about the buyer paying one point to receive a .50% better rate on the loan or the half point for a .25% better rate.   The math on this is just over a two year break even. 

As I acknowledged, there are people that will take advantage of buyers and it is not just limited to mortgage professionals.  Too many times, I have given a buyer a GFE that beat the recommended and preferred (or affiliated) lender of the realtor only to have that lender match my GFE and end up with the loan.   In my opinion this would be equivalent to a realtor telling a prospective buyer what they know a seller would accept based upon insider information or said another way allowing buyer "C" the opportunity to have the first right to purchase a property based upon the best offer submitted by five other bidders.  

If, I mis-interrupted your comments my apologies.   

Jeff and Tim:  I believe that mortgage brokers should be paid accordingly.  I have no problems with that and I do not believe whatsoever that you should take a bath to just be nice.  We are in a business and it should be treated as such.

Tim, I didn't mean to slap you.  I have a file right now where I told the buyer's agent that my client just lost her mother.  I told her husband to get the locks changed to secure the house as I would be showing it and things could disappear and then we'd be spending time on who took what, when and why?  Well, her two sisters broke into the property, damaged the hardwood floors, took things that should have waited until after there mother was buried (of all the things) and then she just found out she is loosing her job in three weeks. 

All that being said, the buyer's agent comes out flying with requests for 200 Amp Service versus the 100 Amp service we were having to put in re City Code, etc.  He wanted the hardwood floors refinished.  Then he wants and I repeat wants an obscene amount of money for tax pro-rations when it is a senior citizens exemption, the assessor doesn't have a finished basement, bath or central air on there reports and they went wonkers on me.  Requests up the whazoo and then I am seeing the usual point for $1,000 an appraisal fee for a single family home $450 (reasonable for VA), Processing Fee $895, Underwriting Fee $795, File Review Fee $895, Doc Prep Fee $695. 

This home is on the largest lot of three sizes in this subdivision, newer FA/CA, Hot Water Tank, Kitchen, Windows all around!, basement glass block windows totally replaced.  Typical size home but most homes have dated FA/CA and kitchens.  The mechanics don't lend value, I fully understand being a reviewer for banks when appraisal and review appraisal come in.  That's when I come in.  Bottom is, I needed someone to tell me if I was crazy with those costs.  That is all I needed to know.  The home is one of the better maintained homes on the market. 

My seller did hear me out and I reached out to a professional mortgage person as this situation, as you can see, is a little "touchy" with alot of losses physical and monetarial.  I wanted the file to stand a chance as she thought that it was alot of money.  It is too her and therefore it was to me. 

I just thought that those fees were high.  Maybe that is the norm on VA now.  I didn't know but I wanted my client to know and understand because she went through the roof like a rocket.  Try to bring that one back down to earth.

I want everything to be a win-win.  Maybe I am nutszo for saying that but I just want my sellers to be comfortable and knowledgeable with the decision.  Some may not have questioned but the response I got back from the buyer's agent was that I had no business reaching out to a professional to review these costs.  He told me that essentially the buyer was financing them in the mortgage.  Now, someone explain to me the net on my seller's side is less because she is giving a credit and now it is financed?  Or maybe it is because this agent is rubbing me the wrong way when I told him the situation right out the gate and to work the contract so as to not aggitate. 

All my client could see was how her Mom had struggled and was basically eating and drinking tea and crackers to keep that cute ranch going and a buyer comes out asking for everything including a higher rated electrical service and oh, btw, please refinish the floors the way I want them?  Closing costs was just the topping on the cake.  (I would have said "icing" but she is already frozen with this buyer).  All she wanted to know was if these costs were normal for VA?

I had a loan officer tell one of my clients, that I referred her to, that if she dumped me, she could save on the commission as it was with a builder.  It happens, the good, the bad and the ugly.  I just love having a team of professionals that I can rely upon.  Bottom. 

I do not think it is right for a Realtor to pull a loan that is on the table.  That is disrespectful and unprofessional!  I agree with you "In my opinion this would be equivalent to a realtor telling a prospective buyer what thye know a seller would accept based upon inside information or said another way allowing buyer "C" the opportunity to have the first right to purchase a proeprty based upon the best offer submitted by give other bidders." 

That right there Tim ignites me.  Unprofessionalism and pulling loans, pulling a buyer from an agent because someone can get a referral fee .. never mind the work, the intensity of the fiie nor the time involved.

Oh, btw, I believe in right-offs and Jeff knows how to work things the best that puts his clients needs out there.  I just got a "raise" from one of my clients because of all the additional work involved in the file.  Never had that happen before, but I took it!