Tag Archives: closing costs

Home Loan Closing Costs On the Rise

Posted on September 9, 2013 | Leave a comment

Home prices and mortgage rates aren’t the only costs on the rise when it comes to buying a house these days. Expect higher closings costs as well, according to a new study by Bankrate.com.

The average closing cost, which includes origination plus third-party fees, is $2,402, up 6 percent from last year.

Lenders appear to be boosting fees before the rise in mortgage rates turns borrowers off and makes it harder for lenders to attract new customers, a George Mason University real estate and finance expert told Bankrate.

“”They know when rates go up, loan applications plunge, so they are trying to generate more earnings on anticipation of lower application volume and lower profits,” Anthony Sanders said.

Lenders say the increased costs reflect more federal regulation from the Consumer Financial Protection Bureau.

Bankrate looked at origination and third-party fees. Origination fees include items such as points, a calculation used to compensate loan officers; and payments for the loan application, other document preparation, loan processing and broker or originator fees. Third-party fees include payments for such items as the appraisal, closing attorney, inspections and surveys.

Read The Closing Documents

Posted on August 8, 2013 | Leave a comment

Real estate people, in general, would rather have dumb customers who follow their instructions so they could move on to the next and many customers quickly. The seasoned person I am now would never allow such an answer to sway me again and would ask for clarification from her boss and go up the chain if need be.

If in the same situation again, what is my recourse short of hiring a lawyer to read and clarify the wording to me and void any penalties that 1. I must pay, 2. delay escrow, and 3. that the escrow or other party may use as an excuse to penalize me for not finalizing the transaction as agreed?

First, what’s the harm in hiring an attorney to review your documents? The cost may be $300 to $500 (unless there are major complications, in which case you really want a lawyer on your side) and will give you peace of mind.

Second, regardless of whether you retain a lawyer, you have the right to demand that you receive a copy of all legal documents you will have to sign in advance of the actual settlement (escrow) date. You should be able to review those documents at least two to three days in advance.

Disclaimer: for information and entertainment purposes only

High Closing Fees? Maybe Kickbacks are to Blame

Posted on June 6, 2013 | Leave a comment

Advice to homebuyers from CAARE

• Always shop for title insurance and settlement service alternatives to the in-house deals you’re offered.

• Ask your realty agent to help you shop beyond the affiliation network. Agents have a duty to help you get the best deals and best service, and they often know where they are. If you find better prices from unaffiliated vendors, don’t let anybody pressure you to go with the in-house, preferred provider. It’s your legal right to choose.

A settlement between the federal Consumer Financial Protection Bureau and a Texas homebuilder is drawing renewed attention to a controversial issue that was prominent during the years preceding the housing bubble: kickbacks in home real estate transactions.

Have questions about the appraisal process? Contact the appraisers at www.scappraisals.com

Put another way, do you know where your money is really going when you pay thousands of dollars in loan fees and closing charges? Is your realty broker or builder getting an extra piece of the action through side deals with lenders or title agencies — all at your expense through higher charges?

The CFPB’s allegations in its case against Dallas-based Paul Taylor Homes illustrate how these arrangements can work: According to the settlement, the builder created partnerships with two lenders — one a bank, the other a mortgage company. In reality, however, according to the CFPB, “both entities were shams” designed to funnel kickbacks to Taylor for referrals of home purchasers needing mortgages.

Though the partnership entities had names — Stratford Mortgage Services and PTH Mortgage — and appeared to be the funding sources for the loans, they in fact were shells with no separate employees, office space or real substance, the CFPB alleged. They did not advertise their mortgage businesses to the general public, instead servicing only Taylor purchasers.