What Is This For?

WHAT IS THIS FOR?

Don’t you hate it when you are charged with hidden fees?  Well, it happens when you are buying a home too!  Chances are you will be taking out a loan from a lender unless you are a cash buyer of course.  Then you will use an escrow service to close out the transaction.  Both your lender and escrow provider will have many small fees tacked on.  That is how they make their money.  However, did you know you can dispute some of the fees?

Your lender is required by law to give you a HUD1 after receiving your mortgage application.  HUD1 is an estimate of all your closing costs and shows you what fees they will be tacking on to your loan.  Third party services that are shown such as appraisals and inspections can’t really be disputed because it is a service they do not provide.  What you can do is dispute or lower some of the fees the lender or escrow is charging you!  One of my favorite ones I advise my clients to dispute is an “Overnight Messenger Fee” that some escrows charge.  I know for a fact that there was no work being done overnight.  So when you get your statements, look over it carefully and see what fees you can dispute or lower based on your situation.  Who knows, maybe you might need to sent messages to your escrow overnight, messages that they will take a week to respond to anyway.

TAKE A LOOK AT ARTICLE BELOW

Gulf Between Good Faith Estimate and Actual Closing Costs Troublesome

DAILY REAL ESTATE NEWS | MONDAY, JUNE 04, 2012

A home buyer gets ready for settlement day only to discover right before the “Big Day” that they are going to have to bring a lot more cash to close the deal than they originally thought. The surprise can sometimes threaten to derail a deal. 

Lenders are required to provide buyers a good faith estimate of closing costs within three days of receiving borrowers’ mortgage applications. But these good faith estimates reportedly are sometimes underestimating—or even greatly over-estimating—the true costs of settlement. 

The Consumer Financial Protection Bureau is working on revamping the good faith estimates and the HUD-1 settlement sheet, which is given to borrowers prior to closing listing the costs. The revamp is expected to provide more clarity to borrowers on closing costs and also make it easier for borrowers to shop around for their mortgage. 

Title professionals report that a lot of the times the estimates provided to borrowers on the good faith estimates over-estimate the true cost of the loan. 

“Lenders' estimates for services rendered by third parties such as appraisers and surveyors are supposed to be within 10 percent of the final figures,” The Chicago Tribune reports. “If the charges listed on the HUD-1 exceed the tolerance, lenders are required to eat the difference.”

As such, many title agents report in a recent survey that some lenders “pad” their initial estimates so they ensure they come within that 10 percent limit at closing. 

“Overquoting” violates the law, says Michelle Korsmo, American Land Title's chief executive. Korsmo says that even if borrowers aren’t charged for items like document preparation and warehouse fees, lenders who provide inaccurate information on good faith estimates make it difficult for home buyers to shop around for the best closing services. 

Also complicating the picture, title agents report in a survey that often times borrowers are receiving more than just one good faith estimate. Sometimes borrowers are receiving two or even up to seven estimates of their potential closing costs. 

Originally Posted On WEDNESDAY, JUNE 6, 2012