RESPA or Just Plain R.E.S.P.E.C.T. - Part IV, YGBSM.

Ok, I will now commence my story, where I left off prior to my "Vacation", hoping to bring smiles to the few faces that actually read and subscribe to my babblings.

So, when we last left our suspense-filled story , our "Loan Counselor" had finally heard the halftime whistle for the paper football game he had been engaged in, while my clients eagerly awaited his response to their application. He was so very proud to show his intellectual prowess and in a moment of brilliance came to the table with a GFE that was substantially lower than the one provided him, a week prior.

The clients are now enraged. They immediately call The Loan Professionalin an effort to secure the last GFE provided by a reputable firm.

Uh oh...I see my fellow readers are cringing again!

Yup, that's right, the Loan Professional reluctantly informs them..."Folks, I am truly sorry; had you only contacted me just 8 hours ago at the "Opening Bell" this morning, I would have been able to secure the GFE as promised. Unfortunately, at this point, I am afraid that the best I can do is an increase of .25 percent, to a rate of 5.5%. That said, I can still "kick the teeth in" to the rest of those charges provided for closing costs by your "Builder's Lender" and "Loan Counselor", which by the way are not even accurate due to the VA funding fees being inaccurate on the GFE provided by His Royal "High"ness.

The clients are now absolutely in a "tizzy". With smoke bellowing from their ears, they decide to write "The Builder" a letter of complaint, in an effort to attempt to rectify this blunder and still somehow realize the advertised "incentive" for closing costs to be covered by "The Builder". In this complaint, the clients decide to include The Loan Professional's GFE, and cover letter stating the time-lines for him to have been able to execute the original GFE provided to "The Builder's" Sales Professional. You remember, the Sales Professional that said, "Oh, I don't see any reason our Lender won't be able to match this...let's see what they come up with."

Ok, so here's the complaint...oh, and it is their complaint not mine, so please excuse the Grammar and or misspellings, etc... ;)

March 7, 2008

Dear :

On Thursday, February 28 th , we signed a purchase agreement for a spec. home, Lot # ____ in the ______________, AZ. On Friday the 29 th we submitted a cashiers check earnest money and on Saturday March 1, completed the on line loan application with ________. At the time of completion, it was written that a shocking disparity between the GFE provide from Nova Home Loans and this new GFE provided by _________; we immediately became concerned.

We had spoken to our representative from Nova on Wednesday evening, March 5th, just after close of business, ensuring that our current GFE still was an accurate assessment of our opportunities with Nova Home Loansand he assured us at that time, the GFE still stood. It should be clear to everyone to read this complaint that the only reason we did not move forward with Nova at that time, was purely because we had believed ______________'s representative's statement regarding the apparent ability for ____________ to match Nova's GFE, coupled with the $4500 incentive towards closing costs.

After receiving the GFE from __________, we immediately contacted Nova Home Loansthe very same afternoon, within hours of receiving this information provided by _____________. Our lender told us that since so much time had passed since the original GFE draft, and with the volatility in the markets just on that day alone he would be forced to increase his GFE by a bit himself. That said, his GFE (enclosed/attached) is still a huge leap from ______________'s provided GFE of the same day.

Because of the delay in ____________'s response, we can no longer lock in the interest rate that was quoted in the initial GFE from Nova. This has now created an additional cost to be incurred by us for no other reason than a delayed response time. Had _______________ responded within the time period, stated in _________________'s own response to our online application, which we created in good faith following explicit instructions from the ________________ sales representation, and matched the GFE as was indicated, we would have had no closing costs and a lower interest rate. When _____________ finally did contact us, not only was their interest rate over inflated but the incentives offered now appear hollow, without substance, and merely “bait and switch” or “shell game” type processes. We discovered ___________ pricing way outside the parameters of comparable GFE, not only at a much higher interest rate, but inflated closing costs as well and truly not even accurate!

Because of the above stated position and facts, we believe _________________ is in violation of RESPA guidelines as we have researched them and under the complaint directives found online at http://www.hud.gov/offices/hsg/sfh/res/reslettr.cfm.

We adamantly and respectfully request these unfortunate events be addressed immediately directly with us or with our Realtor representative, Dan Grammar.

Thank you,