A friend Jeff Belonger blogged Mortgage Junk Fees - And FHA loans are more expensive!!!!! Trying to explain that today's FHA loans are not your father's FHA loans! Today you have to look at FHA because it may well be the best loan available.
He also got into "junk fees" the multitude of line items that appear as charges on so many Good Faith Estimates. He suggested that they should be combined with the points to make the Good Faith Estimate cleaner and more of the cost deductible.
.This is a fair question! If Jeff has to ask then there must be a lot of people with a lot less experience also wondering.
There are two reasons!
One, Brokers unlike bankers can't control the final disclosure, our wholesale source will show their charges as line items. We can't change them.
Two, I explain to my clients that the line numbers on my "Good Faith Estimate" match the line numbers on the HUD-1 they'll get at closing. I instruct my clients to take our original "Good Faith Estimate" to closing to check one against the other! If we made a mistake in items we or our wholesale source charges differently, we'll make it good, then and there! It may only be a "good Faith Estimate" but we're talking about my good faith!
Why junk fees, because they have to be paid even if I pay them they will show up on the closing statement.
It's simply a matter of emphasizing the truth in Truth in Lending!
Please remember two things:
"It's the total cost not the number of line items that comes out of your pocket that's important!"
In the end "The consumers only protection is the personal integrity of their agent!"
Bill
William J Archambault Jr
The Real Estate Investment Institute
For the record: Jeff's good protection, even if he's strictly a mortgage banker, and his bottom line, his total cost are hard to beat! It's Jeff I call about FHA questions.
By TwitterButtons.comBill
William J Archambault Jr
The Real Estate Investment Institute
wja@reii.org 832-259-7078 or 702-516-1569
From my past: GRI 1975, FLI 1974, Catalyst from a client 1974 an agent that makes things happen, REII, The Real Estate Investment Institute 1995.
©William J Archambault Jr ©The Real Estate Investment Institute ©REII
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Bill I have seen many Good Faith Estimates that follow a different format than mine, and it seems that some of these people go out of there way to make it as confusing as possible in an effort to hide cost. But in the end they can't hide the bottom line, and the APR on the TIL, if they manage to do that the new rules that have just gone into effect on the TIL will bite them in the butt at the end and the Closing will be delayed.