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Overstated MIP on GFE for streamline refinance...

Hi,

I am trying to do a FHA streamline refinance with a bank.  I just received my GFE and the lender listed my MIP as $3,526 which is incorrect as my loan closed on 9/30/08 and I'm sure was endorsed prior to May 2009.

The issue that I have is that he won't redisclose or change the GFE.  He says that the higher upfront MIP must remain until the bank can verify my endorsement date which won't occur until next week after I sign the application documents and pay a $399 app fee.

Does this sound reasonable?  I feel that I shouldn't sign anything until this is correct but realize that the settlement can change once loan is processed.  I was burned with a bad GFE when originally purchasing my home and don't want to go through this again.  Details of my loan are below.  Thanks in advance for any help/advice you can give.

Initial Loan Amount:  $201,500
Loan: 30 yr. Fixed
Rate: 4.75% (641 score)
Initial monthly + mortgage insurance: $1,251

Origination: $1,214
Credit: -$5,289
Charges for Settlement:  Total $7,769

MIP: $3,526
Title: $1,144
Escrow: $2,229
Other: ~$870

Total Settlement:  $3,694

  • September 19 2013 - Lawrenceville
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Answers (9)

They can do a case query to get the endorsed date ahead of the application / disclosures. If you have not refinanced since the purchase on 9/30/08 the docs should be set up with the grandfathered MI rates, then re-disclosed if endorsed after May 09.  Rates changed yesterday to your benefit, get a 2nd opinion.
  • September 19 2013
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Never pay an upfront fee to any lender.
  • September 19 2013
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I agree with James an upfront fee is collected so you do not shop the lender, I have worked at a company that collected an upfront fee and they did that only because the submit to close rate was a lot higher because it doesn't allow you to shop and commits you to using them.  Most ethical lenders are confident in their abilities to secure the loan with their service, this is another way to keep you locked in.  Any lender can go under FHA connection and within 30 minutes have all the info you need to prepare a fair quote on your loan being grandfathered in with the lower PMI.  Sounds like you need another opinion.  Good luck!
  • September 19 2013
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Your new case number cannot be assigned until you have signed an application so their approach is sensible. It is true a Case Query can be done on your prior FHA number to confirm endorsement date however the lender is justified to follow its chosen procedure to protect against under disclosure and tolerance violation. The lender of course will charge at closing precisely what FHA requires for UFMIP so on this one aspect I wouldn't be overly concerned.
  • September 19 2013
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Thanks everyone for the information and great advice!  I am getting a few more quotes to confirm I'm getting the best rate & GFE etc.

I'm a little paranoid and my desire is to have an accurate (or close to accurate) GFE.  Since my original closing date was in Sept '08 I feel the MIP should have been correct.  It would be extremely unlikely that my endorsement date would be 8 months after closing.

I called the FHA hotline and they verified my endorsement date in 5 mins so I'm extremely skeptical...

  • September 19 2013
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You should be seeing better terms than the one you posted after the market moved yesterday. However, be aware any new quote may change if your middle Fico goes below 640.  
  • September 19 2013
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When reviewing your quotes, you really need to focus on 2 areas of the GFE.  1) Block A "Your adjusted Origination Charges" - This is what you are actually paying the lender for originating your loan. 2) The interest rate. You should not get caught up with all of the third party fees, since lenders do not have control over them, and they should not vary between lenders.  You should also make sure you are working with the individual you feel will provide the highest level of service.  Anyone can quote rates and fees, but not everyone can get a loan closed.  You want someone who will be available to answer your questions honestly, rather than you having to post your questions on websites like this one. Gather all of the information you feel is necessary to make an educated decision as to whom you want to work with, and start saving some money.  All the best!
  • September 20 2013
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Don't pay anything to that lender and walk away. 

You should be able to obtain the FHA loan with .55 MIP and .01% UFMIP. 

I can pull the case query without even the application if you like and let you know for sure where you stand, and I can do this within minutes. From there, we can get the application taken care of. 

I do several of these FHA and VA streamlines every month. We have a special offer on the closing cost involved on these FHA and VA streamlines right now as well. Our current FHA and VA rates are extremely competitive. We're a very competitive Bank and usually can't be beat for rates and closing cost.

It would seriously be to your benefit to get this completed now with the drop in rates that just occurred. 

Call me to help you get this taken care of!!!

  • September 20 2013
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Guys, you can not charge application fee on FHA- it is not legal.
You can charge appraisal and credit fees. Correct me if I am wrong.
Loan officer can make a mistake preparing the GFE, but loan is not going to close if it is not in compliance. Loans today are closed according to FHA rules or they are not insurable. The new law does not allow the loan originator to change the initial GFE, it can be changed only with changed circumstances. If you do not trust your loan officer move to another bank and they will request a transfer of your FHA case number.
  • September 20 2013
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