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.
