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Please help me with good faith estimate, especially blcok A.

We are refinancing under HARP 2.0, so our home is underwater.  This is the information I got from broker:
current loan balance is 390,794, but my new loan has 396,000 (taxes & insurance added to this, which I will ask to be taken off). Anyhow, new loan is 30 years fixed 3.875% (quoted on 8/2). 

Block 1 our origination charge is 5950 (too high I think???).
Block 2 you receive credit of 7920, so the total for block A (adjusted origination charges is -1970). 

Block 3: appraisal 400, credit report 50 (I understandd this can go up 10%). Block 4 title services 1245. Block 5 and 6 are empty. Block 7 government recording 100 (understand it can go up 10%). My intial deposit for escrow Block 9 is 4813.40 and Block 10 daily interest charge is 213.13 (I think he added those to my loan). Well, I think I'm getting ripped off with the origination charges. The broker gave me his own "fees sheet" and he shows a compensation rebate of 0.75%, which is 2970, but then the fees worksheet has 1000 lender fee. So, I think that the broker is not only getting paid by the lender, but is also getting paid another 1000 from my credit (based on the fees worksheet). I think the origination charge is way too much! I told the broker that I did not want to increase my original loan amout and it went up almost $6000. I think he did this, so it could look like I wasn't paying anything out of pocket. So, I want to know, what should I do now? I don't think I should sign the good faithe estimate, because I do not want my new loan amount to be 396000 and I also do not know what to say about the origination charge of 5950. Please help me. What should I say to broker next????????
  • August 05 2012 - Chino Hills
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Answers (3)

So what did you say? Did you close?

There will always be a cost to a loan...lender and title fees. Pricing does vary and some lenders have great pricing. I have worked with Retail Banks, Brokers and Mortgage Banks.  I have yet to see one that doesn't charge a processing or underwriting fee. This doesn't mean it doesn't exist...It all depends on how a lender chooses to collect for actual costs.

With that said, In this situation he is able to cover the "actual" costs with "credit" to you. Another lender may choose to hide these costs in pricing and offer a 3.87% with no costs/no credit. Same result. Ask your accountant if there is a tax benefit for the origination charges paid.

ID
  • September 04 2012
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Just tell him you want a no closing cost loan.  The new guidelines prevent the brokers to get paid points when the institution pays them to do the loan.  And they are previously set up to a fee for all borrowers they submit to the lender.  In order to provide you with a competitive rate this fee is usually less than 1.5% on points in the loan. so whatever they agreed when they got set up is what they get.  You might be better off this way have them check that out for you.
  • August 30 2012
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"Thank you, but no."?
  • August 05 2012
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