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Weston Florida Real Estate for sale and why is my loan payoff so much higher? I didn't know I had a prepayment penalty.

Many buyers across the U.S. are looking for Weston Florida Real Estate for sale. If you give me the opportunity....you will see that you chose the right Realtor® in Weston Florida for the job.

It is our job to help direct the sellers through the process of getting to the closing table and we try to point them in the right direction. Making all the arrangements for the seller is my job and I do it well. When I go on a listing appointment I always ask the seller if they have a mortgage and is there any prepayment penalties on whether they can't sell for the first 2-3 years of ownership or they have the same issue because they didn't realize when they refinanced or they had a penalty as well.

The reason why I make sure I find this information out is from a past experience I had. A few years ago I had a client that had a problem before the closing with her payoff. I always try to get a draft HUD 24 hrs before the closing just to make sure there aren't any surprises. When I saw the HUD 1 I asked the title company why there was an additional $11,000 on top of the regular payoff. They said the client had a prepayment penalty.

I approached my client and she said she was told by the loan officer that there were no penalties. I asked her what happened and she said she needed to get an equity line on their home. She intends she was misled and instead of an equity line the LO refinanced the whole 1st and added the extra to the first instead of just adding a second. She said she never asked for that type of loan. So I asked her if she had it in writing and to check her note. She said she didn't have anything other than the loan officers verbal notification and when I saw her note...it said she had a pre-payment penalty and it was a bad situation. She kept saying said she was misled and that all she wanted to do was take a 2nd ,but as I mentioned earlier the whole first was refinanced instead. When we tried to negotiate with the bank...they refused and the loan officer was no longer working there. Apparently he was fired HUMMM...

Just so everyone understands me....this is about informing the public that when they are applying for a loan they should ask questions before they sign something. If you are looking to work with a proffessional in the state of Florida... who you can count on to disclose this type of information you might want to consider working with these two gentlemen Matt Blum and David Podgursky. You will not go wrong....but you'll have to read the rest on my outside blog.

You can check out the rest of this article at The Real Deal Tells it like it is in Real Estate

For more information about Weston Florida Real Estate please Neal "The Real Deal" Bloom

Weston Florida Realtor (954)608-5556 or nealb63@myacc.net

RE/MAX Hometown

2500 Weston Road ,Suite 103

Weston Florida 33331

Posted by Neal Bloom-Realtor ® Assoc.-CRS-Weston FL on 09/15/2007 09:22 AM

Comments (30)

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Originally posted at: Weston Florida Real Estate Blog, Neal"The Real Deal"Bloom : Weston Florida Real Estate for sale and why is my loan payoff so much higher? I didn't know I had a prepayment penalty.

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30 Comments on Weston Florida Real Estate for sale and why is my loan payoff so much higher? I didn't know I had a prepayment penalty.

SEP

2007

One of my clients had this same problem. They were unaware they had the prepayment penalty. Its a shame some LO don't inform there clients of the loan situations.

Hi Jeannette,

This is very important when we go in with our estimated net sheets...if we show the client an estimate of their possible proceeds after the sale..we need to be as accurate as possible for them...she is still a client to this day with me and will be listing her home for sale very soon.

This is something I was glad you knew about when we sold our home and purchased another in Weston Florida. Your clients will be grateful you were experienced enough to know.

Neal, I always have our buyer clients make sure there is no pre-payment penalty. Great topic for everyone here.

Missy,

You should..because it only makes matter worse at the closing when the client finds out they are not getting the same proceeds they anticipated. Thanks!

Neal, I am not defending Pre-Pay Penalties first off. However many clients could only get their loan sometimes with a pre payment penalty. I have attended many many closing and I have yet seen a closer not inform a person about the pre-payment penalty.. I am not saying that it never happens but I do believe many people have short term memories when it comes to these things.

Hi Matt,

Please do not take this as a rant..all I am saying is the client should have been told by the LO what she was getting into. She was either had short term memory or she was really misled. This does occur at times and the public need to really understand it.

Neal, I don't think this is a rant. I agree they should understand however I am just letting you know that I have never been to a closing where the borrower did not know about the pre-payment penalty. I am sure that this happens I just don't think it is a rampant as many people think

Matt,

I'm glad you don't think that..I actually think it was a good post for consumers so the ones that are not aware of this will be more inclined to check it out..remember if they want to sell their home and the penalty is still active then it could make a big difference in their net figures. Whether or not they were misled or just forgot is one thing..but it still is a good reminder for buyers and sellers.

It's too bad when LO's don't go over the loan documents well. It's also sad if the client doesn't know what they're signing and sign anyway. In this case it was the equity line of credit that had a pre pay penalty? I had a client who didn't "remember" and the LO was one who I work with often and I know when we are signing docs he goes over EVERYTHING. The note ...he always says....is the most important because it's states everything in it. If the equity line was done through the bank then it was like mine....I had to DRAG it out of the loan department person about fixed rate loans and that I didn't want to take out all the equity. In any case...all parties need to be informed what to look for and consumers don't know about this sort of thing.

Neal - As sad as many of these cases are and I believe some may have been misled.......there are many who willingly signed these loan docs thinking the party would last forever!

Sally,

Not the equity line. She had a first and wanted to take an equity line...the LO refinanced the whole first and added on to the first somehow.She only wanted a second because when he refinanced then the prepayment kicked in on the soft prepay.

Paula,

You are probably right since I was not there when they signed the first loan so I can only go by what the client told me..remember some people do not understand creative financing programs....and this lady only understands the old fashion way.

Jeff I don't know how closings on Purchases or Refinances are done in Florida, but here in Connecticut we are an Attorney State which means that the Borrower is represented by an Attorney on most Real Estate Loans especially if they are done with an in state Lender. The Attorney's go over all the term of the Loan including Pre-Payment Penalties, and even then I hear Borrowers latter on saying that the past Loan Officer never told them about the Pre-Payment Penalty. What they mean in most cases is that they were not listening or paying attention when they were told they had one, or did not care at the time. I am not saying that it is not possible to sneak this by a Borrower, but I in most cases I believe it is a case of convenient memory lose when it comes to these things.

George,

We have attorneys as well that go over paperwork but during a closing I guess people do not have the patience to read or hear that part...she just didn't pay ttention or was never told or shown in writing. I'm not sure other than I think she told me she closed with someone affiliated with the lender.

By the way.....who is Jeff? :)

Oh, I understand now. Now..that is not good.

Sally,

If you didn't read the full post on my outside blog then that is probably why you might have missed it...no biggy:)

Neal sorrrrrrrrrrrrrrrrry I had just finished commenting on another blog and the writers first name was Jeff, so I guess I was still in Jeff mode. Don't ever get old my friend and let the "Oldhimers" set in ...... LOL

Ok George..I'll let it slide this time..but I actually think it was either you or someone else who called me Jeff on another one of my blogs and it was the same excuse...yeah right!:) Better call AARP for some memory help:) Don't worry I'll be joining in another 6 yrs:)

LOL...... Neal, that could have very well been me, and AARP offers up some nice discounts ...... LOL

Maybe you better read the whole post on my new outside blog:) You'll never forget me then:)

I'll write a post about your memory loss:)

Neal now that would be a post that no body would read :)

SEP

2007

George,

I would write it and of course then I would read it and rate it a 5:)

Neal, Thank you for the mention I really appreciate it.

Matt,

I wanted you to see it was nothing to do with you or others that are more professional..it's the others that want the money and then leave the client in the dust. I know you and David would not do it and you have linked me to a few of your blogs as well so thanks.

Neal, oh yes...ever so important! Here in CA that info would be present immediately with the Pre-Lim. That is one of the reasons I use Alliance Title Company with one of the best escrow officers around...there are no surprises!!

Gena,

Thanks for stopping by...yes it can be a problem if the consumer does not read it carefully..I think she just trusted this guy verbally and did not actually read it...because she didn't even know where to find the note when I asked to read it.

SEP

2007

Neal, I can agree 100% that this is a huge problem right now for sellers who are not aware of their mortgage clauses. You guys have done a great job laying out some wonderful information here!

Leah,

Glad to hear you agree..nothing against anyone in particular..consumers really need to know this especially if they have to sell and can't because of the impending penalties.

SEP

2007

Neal- A lot of subprime loans have pre-pays so in addition to a hike in the rate many were unable to refi because of the pre-pay.. Pre-pays caught on when rates began falling and people would refi every few months to take advantage of lower rates before that loans rarely had a prepay because of all the lawsuits in the 80's when rates were so high..

Kaye,

This was probably back in 2003 and this loan was no a subprime loan...the loan officer apparently just refinanced it without them knowing or she just did not understand.

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