Comments on: Reserves and Prepaids on the Good Faith Estimate http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/ Seattle's Leading Resource for Real Estate Information Sun, 08 Nov 2009 01:47:42 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Rhonda Porter http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-333252 Rhonda Porter Sat, 31 Jan 2009 17:44:38 +0000 http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-333252 caramel, you can email me your Note if you'd like. Could it be that your property taxes or home owners insurance increased? caramel, you can email me your Note if you’d like. Could it be that your property taxes or home owners insurance increased?

]]> By: caramel http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-333216 caramel Sat, 31 Jan 2009 04:04:00 +0000 http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-333216 my mortgage contract contained house payment, pmi insurance,reserves for taxes,and reserves for insurance.we had a fixed rate intrest rate @6.75%. lived in the house for 6 months and the payment went up to 1385 per month on a 122,000 house should i get a lawyer to look into this. my mortgage contract contained house payment, pmi insurance,reserves for taxes,and reserves for insurance.we had a fixed rate intrest rate @6.75%. lived in the house for 6 months and the payment went up to 1385 per month on a 122,000 house should i get a lawyer to look into this.

]]> By: Joe Buyer and The Lending Treehouse of Horror: Part 1 | Rain City Guide | A Seattle Real Estate Blog... http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-155193 Joe Buyer and The Lending Treehouse of Horror: Part 1 | Rain City Guide | A Seattle Real Estate Blog... Sun, 01 Jul 2007 18:16:50 +0000 http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-155193 [...] Based on the Good Faith Estimate from early April with the internet lender, his loan is 5% down utilizing an 80/15/5 with a 30 year fixed rate “Jumbo” mortgage priced at 6.75% with no discount or origination points.   Instead of showing itemized fees, the internet lender shows a “bundled closing fee” in the amount of $1025 in section 800 of the GFE.   The title and escrow fees are wrong which are typical when working with an out of state lender.  The second mortgage is a 30/15 at 7.975% with no discount or origination fees.   The estimate did not factor in reserves, so it falsely appears there will be less cash due at closing (unless Joe was waiving his reserve account, which he was not).   I prepare a GFE based on current rates in early June.  At that time, I was able to offer Joe Buyer the same terms.  However, when you factor in the reserves (taxes and insurance), my estimate appears to look less competitive as the payment appears higher and you need more funds for closing. [...] [...] Based on the Good Faith Estimate from early April with the internet lender, his loan is 5% down utilizing an 80/15/5 with a 30 year fixed rate “Jumbo” mortgage priced at 6.75% with no discount or origination points.   Instead of showing itemized fees, the internet lender shows a “bundled closing fee” in the amount of $1025 in section 800 of the GFE.   The title and escrow fees are wrong which are typical when working with an out of state lender.  The second mortgage is a 30/15 at 7.975% with no discount or origination fees.   The estimate did not factor in reserves, so it falsely appears there will be less cash due at closing (unless Joe was waiving his reserve account, which he was not).   I prepare a GFE based on current rates in early June.  At that time, I was able to offer Joe Buyer the same terms.  However, when you factor in the reserves (taxes and insurance), my estimate appears to look less competitive as the payment appears higher and you need more funds for closing. [...]

]]> By: Rhonda Porter http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-142700 Rhonda Porter Wed, 30 May 2007 16:03:56 +0000 http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-142700 Jillayne, on comment 10, you reference the upfront mortgage brokers group. I notice they also advertise on your website. What is your relationship with them? Jillayne, on comment 10, you reference the upfront mortgage brokers group. I notice they also advertise on your website. What is your relationship with them?

]]> By: The Problem with Good Faith Estimates | Rain City Guide | A Seattle Real Estate Blog... http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-141229 The Problem with Good Faith Estimates | Rain City Guide | A Seattle Real Estate Blog... Sun, 27 May 2007 16:04:24 +0000 http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-141229 [...] The Good Faith Estimate is easily manipulated by Loan Originators.   Some LOs might use short term rate locks for their quotes (shorter term cost less than a longer term lock) or they go skinny on the prepaid items without having an estimated closing date from the borrower.   [...] [...] The Good Faith Estimate is easily manipulated by Loan Originators.   Some LOs might use short term rate locks for their quotes (shorter term cost less than a longer term lock) or they go skinny on the prepaid items without having an estimated closing date from the borrower.   [...]

]]> By: Rhonda Porter http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-140183 Rhonda Porter Fri, 25 May 2007 13:19:24 +0000 http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-140183 In addition to the GFE, you need to check each Federal Truth in Lending to make sure there is no prepayment penalty on any of your proposed loans. With your credit scores, this would only be used for increasing the LOs income unless they have offered to use it to lower your rate (either way, I would not opt for a prepay). In addition to the GFE, you need to check each Federal Truth in Lending to make sure there is no prepayment penalty on any of your proposed loans. With your credit scores, this would only be used for increasing the LOs income unless they have offered to use it to lower your rate (either way, I would not opt for a prepay).

]]> By: Jillayne Schlicke http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-140041 Jillayne Schlicke Fri, 25 May 2007 05:13:48 +0000 http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-140041 Hi Sandy, There's a federal law that directs how loan originators are to complete their Good Faith Estimates. Here is a link to the HUD website, which explains the different line items on the Good Faith Estimate, and it's companion the HUD I Settlement Statement, which you will receive at closing, which should match up closely (but rarely perfectly) with the GFE. http://www.hud.gov/offices/hsg/sfh/res/sc3secta.cfm Hi Sandy,

There’s a federal law that directs how loan originators are to complete their Good Faith Estimates. Here is a link to the HUD website, which explains the different line items on the Good Faith Estimate, and it’s companion the HUD I Settlement Statement, which you will receive at closing, which should match up closely (but rarely perfectly) with the GFE.

http://www.hud.gov/offices/hsg/sfh/res/sc3secta.cfm

]]> By: Rhonda Porter http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-139923 Rhonda Porter Thu, 24 May 2007 20:54:37 +0000 http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-139923 Sandy, as I mentioned before, I would be happy to help review your GFEs. I actually enjoy disecting the little buggers. It could be a future post (we'd leave names out to protect the innocent or not so innocent lenders)! ;) Sandy, as I mentioned before, I would be happy to help review your GFEs. I actually enjoy disecting the little buggers. It could be a future post (we’d leave names out to protect the innocent or not so innocent lenders)! ;)

]]> By: Rhonda Porter http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-139922 Rhonda Porter Thu, 24 May 2007 20:52:43 +0000 http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-139922 Sandy, how did you go about selecting your different LOs? What type of institutions do they work for (bank/broker/credit union)? I would not work with anyone who didn't seem "upfront" and you also need to be careful of smooth talkers. Selecting a LO is not an easy process and I'm glad that you are putting so much effort into this. Your questions are again, excellent and valid. I wrote a topic about points (discount and orig.) at http://www.raincityguide.com/2007/03/03/whats-the-point/ Different lenders do have different fees. If I have to broker vs close in our credit line (I'm a correspondent lender) there are more fees. We close a majority (I'd say 80%) of our loans in our credit line. Plus, some might price some of the cost into the rate...it is challenging to shop. And to add to that, rates change constantly. So far, since Monday, one of the major lenders I work with has had 7 price changes (in 4 days). So the rate quote you received on Monday...or even yesterday... from one lender is no longer valid when comparing it to another lender. LOs experiences, training and ethics will all be unique to the individual. And, how much a LO expects to be paid on a transaction (how your mortgage is priced) varies, too. The last stats I heard for WA State is that we have 13,000 mortgage brokers...this does not include loan originators who work at banks. (I believe there are more brokers than bankers). My point is that it all comes down to the individual. You are basically shopping for a person and not the rate/fees. http://www.mortgageporter.com/reportingfromseattle/2007/01/how_to_pick_a_l.html Sandy, how did you go about selecting your different LOs? What type of institutions do they work for (bank/broker/credit union)?

I would not work with anyone who didn’t seem “upfront” and you also need to be careful of smooth talkers. Selecting a LO is not an easy process and I’m glad that you are putting so much effort into this.

Your questions are again, excellent and valid. I wrote a topic about points (discount and orig.) at http://www.raincityguide.com/2007/03/03/whats-the-point/

Different lenders do have different fees. If I have to broker vs close in our credit line (I’m a correspondent lender) there are more fees. We close a majority (I’d say 80%) of our loans in our credit line. Plus, some might price some of the cost into the rate…it is challenging to shop. And to add to that, rates change constantly. So far, since Monday, one of the major lenders I work with has had 7 price changes (in 4 days). So the rate quote you received on Monday…or even yesterday… from one lender is no longer valid when comparing it to another lender.

LOs experiences, training and ethics will all be unique to the individual. And, how much a LO expects to be paid on a transaction (how your mortgage is priced) varies, too.

The last stats I heard for WA State is that we have 13,000 mortgage brokers…this does not include loan originators who work at banks. (I believe there are more brokers than bankers).

My point is that it all comes down to the individual. You are basically shopping for a person and not the rate/fees. http://www.mortgageporter.com/reportingfromseattle/2007/01/how_to_pick_a_l.html

]]> By: sandy http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-139919 sandy Thu, 24 May 2007 20:40:10 +0000 http://raincityguide.com/2007/05/22/reserves-and-prepaids-on-the-good-faith-estimate/#comment-139919 Ok one of the reasons why I asked these questions was because I am contacting multiple people now for loans. The GFE lines 803, etc posted here all have different titles in words and figures. Some loans have loan orgination fees while some have points. I am curious about many things 1) why do LO's use different terms for the same line numbers? for a person like me, its very confusing 2) why is there so much vairability in the numbers? I feel this process is not as transparent as it needs to be. 3) I did ask each LO all of the above qns. Some are very upfront about explaining them to me. Some dont give me resonable sounding explanations. Now since I dont know much abt this process, I am wondering my instinct (if you will) is wrong when i say a LO's explanations are not reasonable. What I dont get is how come the advice from LO's change even though I go through the same listed of bulleted specs (what I want) with each LO. Ok one of the reasons why I asked these questions was because I am contacting multiple people now for loans. The GFE lines 803, etc posted here all have different titles in words and figures. Some loans have loan orgination fees while some have points. I am curious about many things 1) why do LO’s use different terms for the same line numbers? for a person like me, its very confusing 2) why is there so much vairability in the numbers? I feel this process is not as transparent as it needs to be. 3) I did ask each LO all of the above qns. Some are very upfront about explaining them to me. Some dont give me resonable sounding explanations. Now since I dont know much abt this process, I am wondering my instinct (if you will) is wrong when i say a LO’s explanations are not reasonable. What I dont get is how come the advice from LO’s change even though I go through the same listed of bulleted specs (what I want) with each LO.

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