I had a client who was relocating from Georgia up to Connecticut and needed a 95% LTV loan. He was adamant about doing an 80/15, and I said 'perfect, I wouldn't recommend going any other way'. He had the credit for it. Everything was peachy. At the time, I was using Principal (before they sold CITI- blegh!) and their high CLTV stuff was awesome. (I just got teary-eyed thinking of the good old days.) Everything seemed to be going fine...
But then something happened. He had shopped around like a good consumer, and decided my GFE was too high. There was a gap of about $300 between me and the next guy's GFE. Ok. I said let's go through the numbers. Depending on the time of month you close, you could pay more or less at closing. This is an estimate, and I'm not going to lie to you to get you to use me.' See, we use 15 days interest on our GFE's, some guys only used 5 or so. There's the $300+. It's not like I was charging him points, or ridiculous fees- it was literally that small of a difference.
Dan, we'll name him to protect his identity, ended up going with another company, a company that promised him all I had and MORE- they 'saved' him a whopping $300.
Dan calls me FRANTIC on the day of his closing. 'I need help, they said they aren't licensed to do second mortgages and they just did the one loan. I signed the paperwork, they said they'll refi me in a few months. What should I do?' Let's just say I had no sympathy and leave it at that.
THIS IS A TRUE STORY. I AM NOT MAKING THIS UP, AND IF I HAD THE NAME OF THE COMPANY, I WOULD POST IT KNOWING THAT THEY PROBABLY ARE NO LONGER IN BUSINESS.
Lesson #1: If a client bickers about $300, drop them like a bad habit. It will only end badly.
Lesson #2: If a company says they can do second mortgages, and then admits they can't AT THE CLOSING- sue their asses and file a complaint with the Banking Department.
Lesson #3: Honesty is sometimes lost on fools. I have lost more business than I care to admit by being honest. Why does honesty scare so many people?
Lesson #4: Don't get wrapped up in the 'bottom line' on a GFE. Numbers change. Any buyer out there should educate themselves about this fact- the only things they should care about are the actual lender fees- everything else is variable. Add up the app fees, the processing fees- all that stuff. Use that to negotiate- not things that MOVE from day to day- like interest or even attorney fees.
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