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Take The Guesswork Out of Your Good Faith!!!

By
Mortgage and Lending with Guild Mortgage Company

 

I pride myself on being transparent with my clients, therefore nothing frustrates me more than when my clients sends me a competitor's good faith estimate to review on their behalf, and I note that fees and origination points have not been outlined accurately.

Recently, I encouraged my client to investigate rates and fees on her own, and to do the apples to apples comparison between my good faith estimate and the competitors, to ensure that I was providing her with the best options available. When she provided me with an out of state lenders good faith, it noted that her rate was 4.625%, which was a great rate, however, it did not outline the fees it cost to GET this rate. She was under the impression that she could get a 4.625% rate with zero loan fee!!!

Not only was this not accurate, but it is also a misrepresentation that many borrowers fall victim to. When lenders do not outline the actual costs, then the proper APR is not disclosed, and many people do not discover this significant error until they are at closing.

If you are receiving a credit from a builder, agent or seller, the "loan fees" still need to be outlined on the good faith estimate.

Here is the example why I am writing this post:

When I priced out her loan, my good faith outlined a 5% rate with zero loan fees, whereas the competitor's good faith outlined a rate of 4.625% with zero loan fees.

While this appears to be a drastic difference in rate, to put it into perspective, if my customer had asked me to lock 4.625% that specific day, the loan fee associated with that rate would have been 2.375%! That is a SIGNIFICANT difference.

These differences are precisely why I am so excited for the industry wide changes to good faith estimates. Not only will this help eliminate confusion for our clients but it will keep everyone honest!

 

Heather Burns

Home Mortgage Consultant

Wells Fargo Home Mortgage

10900 NE 8th St Suite 1430

Bellevue, WA 98004

(425) 468-8645 Tel

(206) 714-3522 Cell

(866) 496-5671 Fax

Heather.S.Burns@wellsfargo.com

Website: www.wfhm.com/heather-burns2

Follow me on Twitter: www.twitter.com/urownlo

 

 

 

 

Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

So very true, Heather.  It is frustrating.  I know I'm not always going to be the cheapest deal in town, but it's only fair to make sure the comparisons are true comparisons and not just a pie in the sky fabrication.

Oct 15, 2009 06:26 AM
Heather Burns
Guild Mortgage Company - Kirkland, WA

Jason, Thank you for sharing my pain! I do think the new Respa changes will help!

Have a great day!

 

Oct 15, 2009 08:46 AM