Whose job is it anyway?????

Mortgage and Lending with Finance of America MLS 6621

Whose job is it anyway?????

There is a lot of discussion about who is responsible for notifying the buyer about the closing costs as seen from Ralph Gorgoglione post The buyers didn't know about closing costs? Whose fault is that: The buyer's agent or the lender? Seems like a relatively simple and harmless question, but it opened a firestorm in the AR community.


To me the answer is very simple; it's my job and my responsibility as the mortgage guy. moneyI am responsible for making sure the buyer understands the parameters of the deal, what their responsibilities will be, what their actual closing costs will be, what the amount will be they are to bring to the table, what form that amount needs to be in and whole host of other items the buyer may be confused about. I am the "money man" and as such I take full responsibility and if that buyer comes to the table without prior knowledge or even one penny short, I have no one to blame but myself.

It is my job to help the buyer to understand about the closing costs, the escrows and prepays in detail. I want my borrowers fully understanding what they sign, the process, the fees and feeling comfortable about it and I cannot for one minute assume they understand the process as I do.  I do this day in and day out where they might buy mortage appilcationone house in a lifetime.     

There are some loan officers that say the buyer should know what is expected of them simply by all the disclosures and many forms the buyers are required to sign at the beginning of the process; I say bullcrap. Those loan officers assume the buyer will understand the (or even read) the myriad of forms they are requested to sign at the disclosure stage. In my experience most buyers will, not only not understand the forms but most won't even bother to read them, they'll just sign on the dotted line. To add insult to injury the new GFE (the one form that is supposed to shed light on all the "money") is not worth the paper it's written on. It has one from a one page fully itemized and detailed form to a 3 page monstrosity that even some loan officers struggle with to understand or prepare properly.   

It's not that buyers are stupid, ignorant or lazy it's simply that they are overwhelmed by the entire process. The buyer is excited at the prospect of buying a home, stressed at the prospect of taking on such a large financial commitment and confused about the entire process. They are nervous and excited about the deal all at the same time and it's my job to make my borrowers fully understand what they sign, the process, the fees and feeling comfortable about it. I will have failed miserably if they are not comfortable about the financial impact of their decision. answers

I go over all the numbers with buyer and calculate IN ADVANCE (at time of application) how much the buyer is responsible (and in what form) to bring to the table. I will go through the numbers with the buyer at the time of application, upon submission and once again the day before closing to allow them time to get to the bank and get the cashier check. There is simply no excuse for the buyer not feeling comfortable about the funds and process.

Comments (4)

Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Ray - You're right that it is your job as the lender, but it's also my job as the Realtor. If either one of us lets a client enter a closing room not knowing fully what is going on, we're complete incompetents.

Jul 08, 2011 08:30 AM
Dave Wierzbicki
RE/Act Real Estate Coaching System - Reading, PA
RE/Act Real Estate Coaching System

Well, I can't believe no one threw the title comapny under the bus

Technically, we love doing it but are ultimately reliant on the lender to provide the info

There is a bill out there that is being batted around that requires lender figures and docs 72 hours in advance of closing and that would then require a "completed" HUD by the title company 48 hours in advance making everyone's life easier

but don't hold your breath


Jul 08, 2011 08:54 AM
Kathleen Donovan
RE/MAX South County - Charlestown, RI
GRI, CBR, SRES, South County RI Residential Speci

THANK YOU, THANK YOU for writing this, Ray.

I just recently dealt with a lending institution that my buyer selected. Now, normally, I try to persuade my buyers to use one of my "preferred" lenders, because I know the job will be done not only right, but also professionally.  But, since these buyers had closed 7 other loans with this lender, I thought it would be OK this time....

I kept in touch with the L.O. throughout the entire process. Here's what happened 3 days before the closing:

My buyers got notice from the lender that the mortgage rate lock needed to be extended to the tune of an $850.00 fee to the buyers in order to clear the loan for closing.

WHAT ??!!

First of all, the buyers had no idea that they signed a 30 day rate lock at the time of application, and I was not informed of this by the L.O. either.. Secondly, the date of the application was 40 days before the closing date on the P&S.  So, I called the L.O. and asked 1) why was I not informed of this lock,  2) why in the world did she put them in a 30 day lock when it was not enough time to meet the closing date, and  3) why the heck didn't she explain this to the buyers when they signed it at application?

Naturally, she told me that she DID tell the buyers, and that it was not her place to disclose this information to me as their real estate agent. She said they could either pay the fee, or not close on the property. Let me tell you that did not sit well with me so, I got the V.P. of the company on the line and he immediately started asking me over and over again: "WELL, WHO'S FAULT IS IT ?", and proceeded to tell me that the buyers were made aware of the rate lock, chose to ignore it, and must pay the fee or forfeit the loan and the purchase. This turned into a very heated discussion, and the V.P. would not back down until I started talking about bad practice, and reminding him of how many loans they had closed with my buyers. After much less-than-cordial debate, we finally got the lender to absorb 70% of this fee so they could close on the loan.. ( I don't think they should have had to spend a extra cent, but they really wanted this house...)

Sorry so lengthy, but, don't you think the L.O. fell down on the job by not explaining this to the buyer and communicating this to me, not to mention, locking a rate that was not enough time to cover through to the closing date on the P&S in the first place ?

Jul 08, 2011 09:10 AM
Ray Waisler
Finance of America - Atlanta, GA
NMLS #6621 - Specializing in Jumbo FHA & VA

Dick - I'm in complete agreement, but I have a character flaw that dictates I take ownership of every transaction and as such I take full responsibility.

Dave - That is by no means the function of a title company and therefore there is no reason to take responsibility.

Kathleen - Sounds like a lender or loan officer I would ever consider going anywhere near again. It's really a shame that there are still some of those lenders and lO's out there and your buyer had to incur an additional expense.


Jul 09, 2011 08:55 AM