Why Do Some Loan Officers Give Out Estimates With Incorrect Fees?

Mortgage and Lending with Guaranteed Rate NMLS# 2611 NMLS #151088

Why do some Loan Officers give out estimates with incorrect fees?

This could be the million dollar question.  Even with the new GFE that took effect on January 1, 2010, I have still seen very inaccurate estimates from time to time.  I recently saw one where several fees that were inaccurate. 

Last spring, the Georgia Department of Banking and Finance increased the GA Residential Mortgage per loan fee from $6.50 to $10.00.  Nearly a year later, this loan officer is still disclosing $6.50.  I guess they missed the memos and announcements on this. 

The estimate also had the Georgia Intangible Tax and the GA Transfer Tax listed incorrectly.  Since those fees are both set by the State of Georgia, there should be no variance in either of those fees.  In addition, the GFE has no tolerance for these fees to increase from what was disclosed to the borrower.

They also did not include fee for a Title Insurance Binder or the Lender's Title coverage.  Both are always charged in GA when the buyer is obtaining a mortgage. 

With basic mistakes like these, you have to wonder how they successfully close transactions on time.  Accuracy upfront is critical to start out the mortgage approval process.  Without that, it's going to be a bumpy ride for all of those involved.






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John Saari
Worcester, MA
"The Mortgage Buddy"

I like your post Rodney. When loan officers don't do things the right way it makes it harder for the honest people. I spend so much time re-assuring clients after they have had bad experiences. I think our industry has gotten better the last year but it still has a ways to go.

Feb 20, 2011 11:01 AM #1
Diana Manzato
Highland Village, TX

Yep, any one of many people can cause a transaction to fail....lender inaccuracy, inspection, appraisal...the list goes on. I'm glad to hear there are lenders out there interested in accurancy!

Feb 20, 2011 11:13 AM #2
Andres Munar
Keystone Alliance Mortgage - State College, PA
Experience The Difference

If you find the answer to why they do it let me know :) I run into a bunch of GFE's with incorrect fee's as well. And I think to myself "you were really going to do business with this person." I just don't get it, it's pretty black and white these days.

Feb 20, 2011 11:33 AM #3
Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

John....A lot of the ones creating the problems are gone.  Some have managed to survive though.

Diana.....So you so correct.  Everyone plays a critical role.

Andres...By the time the borrower figures out the truth, its usually too late for them to do anything about it.

Feb 20, 2011 01:38 PM #4
Donne Knudsen
Los Angeles & Ventura Counties in CA - Simi Valley, CA
CalState Realty Services

Rodney - My guess is that these folks with the crap GFE are probably not closing many loans these days (if at all).  JMHO

Feb 20, 2011 02:18 PM #5
Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

Donne....You are probably correct.

Feb 21, 2011 01:06 AM #6
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

The whole problem with good faith estimates is that they still are nothing but estimates!

Feb 25, 2011 03:42 PM #7
Rodney Mason
Guaranteed Rate NMLS# 2611 - Atlanta, GA
VP of Mortgage Lending - AL, FL, GA, SC, & TN

Jim....They are still just estimates and some do use that to the full extent they can.

Feb 26, 2011 12:39 AM #8
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