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Provident Funding Bait and Switch Lender's Credit?

Provident is quoting very high lender's credit such as 1 point credit for a 3.625%, 30 year loan. Yet they state,

"... a positive dollar amount represents points to be paid to Provident Funding at closing while a negative amount shown in brackets ( ) represents a credit provided by Provident Funding to be used toward covering some or all of the Non-Recurring Closing Costs associated with the loan.

Any excess/unused credit will be retained by Provident Funding and not paid out as cash to the customer at closing."

Does this mean the credit can only go as high as the actual NRCC and the excess will be lost?  If so, this is very deceiving.
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June 19 2012 - US
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Do you think a 1 point credit will exceed your closing costs? 
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June 19 2012
You are correct. That is exactly what it means.  How is it deceptive when they fully disclosed it to you?

Find out what the NRCC are, calculate the lender credit based on the loan amount you would like and then determine if there is money left over or you are using the full lender credit.

Or take a 3.5% rate with a lower credit.  

They are offering you a 3.625% rate with the possiblity to have no closing costs and you are not happy? That's a great deal. Provident has some of the best rates in the country. I guess some people are just never satisfied.
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June 19 2012
Profile picture for Kenzo San
Clay and Brian:

Thanks for your responses.  Clay, yes the 1 point credit will exceed my closing costs.  Brian,  I believe it is deceptive in the sense that it is only disclosed when you dig deeper into their website - not right on the quote web page. Also, a layperson like myself is drawn towards the high lender's credit thinking that (I think reasonably) that a credit is the amount stated not limited by NRCC.  It's not that I am not satisfied - I am just trying to get accurate information.
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June 19 2012
Many lenders will allow unused credit to be applied as a principal curtailment, effectively paying down your loan balance with the excess at closing.    Provident tends to play by their own rules.
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June 19 2012
If you are still answering questions, what is being charged for origination and what is the adjusted origination amt?
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June 19 2012
Profile picture for Kenzo San
Clay:

I am just getting the quotes from Provident's web site so I don't have an actual adjusted origination amount.  As of 2:55 p.m. PST the 3.625% rate has a lender's credit of 1.125% ($4,331.25 credit for a $385,000 refi).  Provident charges a $1099 admin fee and a $450 closing fee (whatever that is).

As I mentioned before, if all lender's credits above NRCC is lost shouldn't Provident make that clearer upfront?  I think it is misleading to list the full amount of credit because it is not really fully available and it leads people to think that the excess above NRCC can be used to pay down the loan balance which is not the case.
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June 19 2012
Thanks, after using part to offset the PF fees that leaves $2782 and I am guessing it will all be applied to the hard costs. 

Sorry, 1 more question, have you seen an appraised value yet or estimating value and if so, what LTV are you estimating? I ask that because if you KNOW it is 40, 50, etc then no problem but if around 77, 78, you could have trouble since they are extremely tough on reviewing appraisals.
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June 19 2012
Profile picture for Kenzo San
Appraised value is $460,000.  So LTV is 83.7%.   So yes, theoretically  I could have a hard time with PF, but I think I'm going with another  company.  By a hard time do you mean paying PMI?  I've already resigned myself to that.

I think this is getting conversation is getting offtrack since my main question had to do with the lender's credit PF is offering.
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June 19 2012
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These guys are awful, check their other reviews online, strung me along on a refi for six months and couldn't get it done.  Totally unreasonable requests for documentation.
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March 14 2013
 
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