Answers (25)
- Sinead McAllister, "San Diegos Broker"
- Contributions:254
Hi Andy,
There is actually some paperwork involved in preparing and recording the new subordination agreement. So I am not sure what the amount of the fee is, but if it's $100 or something, it might not be too out of line. Your new loan officer should have taken that into consideration and at least given you a heads up about it. I would ask them for a credit, based on the higher interest you have paid since September (since they completely stink and have taken so long), and due to the non-disclosure of the fee.
I live and work in Oceanside too, and know some fantastic lenders, so feel free to contact me and maybe you can compare rates, turn times, etc. and get a better deal...
Thanks!
Sinead
There is actually some paperwork involved in preparing and recording the new subordination agreement. So I am not sure what the amount of the fee is, but if it's $100 or something, it might not be too out of line. Your new loan officer should have taken that into consideration and at least given you a heads up about it. I would ask them for a credit, based on the higher interest you have paid since September (since they completely stink and have taken so long), and due to the non-disclosure of the fee.
I live and work in Oceanside too, and know some fantastic lenders, so feel free to contact me and maybe you can compare rates, turn times, etc. and get a better deal...
Thanks!
Sinead
- Mack McCoy, "Mack McCoy"
- Contributions:2109
Well, Hamp, you're absolutely right - it's not the consumer's job to walk into the office knowing the procedures and the costs, it's the LO's job to educate the customer so that the CUSTOMER can make an informed decision!
There's another discussion as an alternative to refinancing where the borrower would pay off the first with the HELOC, assuming they had that available. This would seriously accelerate the payoff of the home if done correctly. Given Mr B's statements that rates should hold through 2014, this would at minimum be something to throw on the table for what appears to be a highly qualified, low LTV, High FICO borrower.
However, they would have had to consult with an actual loan officer to explore such options.
However, they would have had to consult with an actual loan officer to explore such options.
- Clay Branch, "Georgia Loans"
- Contributions:8819
If the loan was not priced with the CLTV the terms may be off too. It is based on the credit limit, not the 0 loan balance.
Never mind, I see below they stated the LTV is 20% so the CLTV is probably not a factor anyway.
Never mind, I see below they stated the LTV is 20% so the CLTV is probably not a factor anyway.
- Hamp Yonce, "Zilluminati"
- Contributions:3507
Thumbs up to the LO is a moron, and to the fact that it isn't surprising. My little riddle rant was more about the fact that folks oft want to know the fees, in a meaningful writing, before they let you pull their credit, and in the old days, before dumb new laws, with more unintended consequences than intended ones, it was acceptable to accommodate them, without fear of being forced, by law, to eat an honest and trivial mistake, but still being allowed to eat the trivial mistake out of integrity, without jeopardizing having to pay for all the other fees, by force of ridiculous law.
I don't even think the OP is offeded by the disclosure of the fee, or lack of, as much as they are the audacity of BofA to charge, or "demand" it, as they said. It is normal. It was left off the disclosures. If they want the loan, somebody has to pay it. The big greedy institution hasn't even been asked to eat it yet. They should, and probably will. But ethically, the OP should pay for it, IMHDO. But since it is BofA I have no real problem if the OP makes them eat all the fees, for not disclosing this one, that they aren't even reaping.
I swear I'm not arguing with any of the previous excellent responses. Just ranting about the retarded inflexibilty and asinine hairsplitting involved in the current origination nightmare. I feel for the honest LO's of the world.
I don't even think the OP is offeded by the disclosure of the fee, or lack of, as much as they are the audacity of BofA to charge, or "demand" it, as they said. It is normal. It was left off the disclosures. If they want the loan, somebody has to pay it. The big greedy institution hasn't even been asked to eat it yet. They should, and probably will. But ethically, the OP should pay for it, IMHDO. But since it is BofA I have no real problem if the OP makes them eat all the fees, for not disclosing this one, that they aren't even reaping.
I swear I'm not arguing with any of the previous excellent responses. Just ranting about the retarded inflexibilty and asinine hairsplitting involved in the current origination nightmare. I feel for the honest LO's of the world.
- shapiroamg
- Contributions:3136
I am trying to drive home the point that this loan officer here is a moron.
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And I'm fairly certain there was no loan officer involved here seeing how its BofA. Any semblence of a proffesional loan officer staff was shown the door years ago.
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And I'm fairly certain there was no loan officer involved here seeing how its BofA. Any semblence of a proffesional loan officer staff was shown the door years ago.
" Would it be a change in circumstances if the Borrower didn't disclose the existence of the HELOC, since it had zero balance maybe, at initial interview, and GFE was generated, and then HELOC existence was discovered at time of pulling credit report."
Not likely because the loan officer should have pulled the credit report and the HELOC would show up even with no balance. A preliminary title report would also show the lien. If the loan officer did not pull the credit prior to issuing the GFE, it's still a tolerance violation because RESPA assumes that all 6 elements of an application were met upon issuance of the GFE so not looking at or pulling a credit report is not a valid reason.
" In addition, the loan originator is presumed to have relied on the borrower‘s name, the borrower‘s monthly income, the property address, an estimate of the value of the property, the mortgage loan amount sought, and any information contained in any credit report obtained by the loan originator before providing the GFE. "
I agree the amount if the fee is relatively small; it's just the principal. I guess in not so much of a veiled manner, I am trying to drive home the point that this loan officer here is a moron.
Not likely because the loan officer should have pulled the credit report and the HELOC would show up even with no balance. A preliminary title report would also show the lien. If the loan officer did not pull the credit prior to issuing the GFE, it's still a tolerance violation because RESPA assumes that all 6 elements of an application were met upon issuance of the GFE so not looking at or pulling a credit report is not a valid reason.
" In addition, the loan originator is presumed to have relied on the borrower‘s name, the borrower‘s monthly income, the property address, an estimate of the value of the property, the mortgage loan amount sought, and any information contained in any credit report obtained by the loan originator before providing the GFE. "
I agree the amount if the fee is relatively small; it's just the principal. I guess in not so much of a veiled manner, I am trying to drive home the point that this loan officer here is a moron.
- Hamp Yonce, "Zilluminati"
- Contributions:3507
This is what it has come to. What does a re-subordination agreement cost these days?
Would it be a change in circumstances if the Borrower didn't disclose the existence of the HELOC, since it had zero balance maybe, at initial interview, and GFE was generated, and then HELOC existence was discovered at time of pulling credit report. Is premature disclosure a defense?
I think the Borrower should have to pay it even if it wasn't on the GFE, but I'm old school. If it is less than $100, it is a petty issue.
Would it be a change in circumstances if the Borrower didn't disclose the existence of the HELOC, since it had zero balance maybe, at initial interview, and GFE was generated, and then HELOC existence was discovered at time of pulling credit report. Is premature disclosure a defense?
I think the Borrower should have to pay it even if it wasn't on the GFE, but I'm old school. If it is less than $100, it is a petty issue.
- shapiroamg
- Contributions:3136
I've been schooled by the professor!!
Started the loan in Sept?!?!?! Holy TurnAround Times!!
Started the loan in Sept?!?!?! Holy TurnAround Times!!
I don't believe the conversation is on whether it should be charged. Hopefully the OP sees now that it's very normal and indicated. I believe the bigger issue is failure to disclose. A subordination fee is no different than any other fee that a loan officer should be aware of in a refinance and failure to disclose it should be a tolerance violation in my opinion.
- Mack McCoy, "Mack McCoy"
- Contributions:2109
Thank you, Clay; you get my vote for Best Answer.
CE, the original HELOC opened up in second position. When you refinance the first, the act of paying it off moves the HELOC into first position. The HELOC can't be moved back into second position without their permission, hence the subordination action, hence the fee.
CE, the original HELOC opened up in second position. When you refinance the first, the act of paying it off moves the HELOC into first position. The HELOC can't be moved back into second position without their permission, hence the subordination action, hence the fee.
Some may interpret the rules to include this as a valid Changed circumstance and others may not. I can tell you that I have never seen this as a valid changed circumstance; the rules read as follows.
"Changed circumstances is now defined in § 3500.2 as: (1) Acts of God, war,disaster, or other emergency; (2) Information particular to the borrower or transaction that was relied on in providing the GFE and that changes or is found to be inaccurate after the GFE has been provided, which information may include information about the credit quality of the borrower, the amount of the loan, the estimated value of the property, or any other information that was used in providing the GFE; (3) New information particular to the borrower or transaction that was not relied on in providing the GFE; or (4) Other circumstances that are particular to the borrower or transaction, including boundary disputes, the need for flood insurance, or environmental problems.
None of the information collected by the loan originator prior to issuing the GFE may later become the basis for a ―changed circumstance‖ upon which a loan originator may offer a revised GFE, unless the loan originator can demonstrate that there was a change in the particular information or that it was inaccurate, or that the loan originator did not rely on that particular information in issuing the GFE. In addition, the loan originator is presumed to have relied on the borrower‘s name, the borrower‘s monthly income, the property address, an estimate of the value of the property, the mortgage loan amount sought, and any information contained in any credit report obtained by the loan originator before providing the GFE. The loan originator cannot base a revision of the GFE on this information, unless it changed or is later found to be inaccurate."
- Andy Mann
- Contributions:17
Alittle more background. The re-fi rate with BoA was 3.65%. We started the process back in late September. We have no financial issues, stable income over $75K per year, credit scores above 800 - LTV is 20% and new loan under $100K.
- shapiroamg
- Contributions:3136
Still wouldnt prevent BofA from charging it based on a Change in Circumstance. You might be able to argue that they need to pay especially since they knew from the beginning that a subordination was needed.
Personally I think they will eventually find a way to pass the charge on to you.
Personally I think they will eventually find a way to pass the charge on to you.
- Andy Mann
- Contributions:17
Thank you for the response. Unfortunately the 'HELOC' bank (US) wants $$500 early closing penalty. I have just gone through my GFE and there is nof mention of this subordination fee - lots of other fees but not anything eidentified as 'subordination - resubordination' - just the regular stuff 'title, insurance and filing - etc.
- shapiroamg
- Contributions:3136
Subordinations can be tricky. As a LO you have to plan the whole refi around it. Some banks and CU's can turn subordination requests around in a couple days, others sometimes takes weeks. A long while back Chase was taking almost 2 months. Client comes to me with a refi and wants to keep their existing heloc, I give them the options:
-Cost to keep open (subord fee and recording the subord)
-we also might have to lock for longer to accomidate the sbordination step. Long locks cost more either with up front fees or higher rates
-then we weigh closing the line (more resonable if there is no balance).
Then the client makes up their mind. We have a good feeling on turn time for most of the local and regional banks for their subordinations. BofA is actually pretty reasonable with these too. Its when someone has an out of area bank that adds to the unkown.
-Cost to keep open (subord fee and recording the subord)
-we also might have to lock for longer to accomidate the sbordination step. Long locks cost more either with up front fees or higher rates
-then we weigh closing the line (more resonable if there is no balance).
Then the client makes up their mind. We have a good feeling on turn time for most of the local and regional banks for their subordinations. BofA is actually pretty reasonable with these too. Its when someone has an out of area bank that adds to the unkown.
" ... so, if he closes the unused HELOC, there will be no subbordination fee, right group-of-people-who-do-this-for-a-living?"
If he closes the HELOC, they will most likely charge him a fee to close it. They have all angles covered.
If he closes the HELOC, they will most likely charge him a fee to close it. They have all angles covered.
- Caveat Emptor
- Contributions:501
... so, if he closes the unused HELOC, there will be no subbordination fee, right group-of-people-who-do-this-for-a-living?
- shapiroamg
- Contributions:3136
I think we both screwed up assuming that BofA has Loan Officers. Im sure they are just order takers and know nothing much more than filling out an application. My bad.
"Gee Proffesor, you would think BofA would know something about Subordination Request Fees? I would think they invented it.
One would think! And let's not forget the 10 business day turn time to write up a document. If the loan officer didn't know about the fee, I wonder if they knew about the amount of time it will take and planned accordingly for the lock. Since BofA already takes a significant portion of a person's life and saps their will to live during the process, another delay will only make things worse.
One would think! And let's not forget the 10 business day turn time to write up a document. If the loan officer didn't know about the fee, I wonder if they knew about the amount of time it will take and planned accordingly for the lock. Since BofA already takes a significant portion of a person's life and saps their will to live during the process, another delay will only make things worse.
- shapiroamg
- Contributions:3136
Gee Proffesor, you would think BofA would know something about Subordination Request Fees? I would think they invented it.
" I was never notified, at any time that this 'subordination fee' would be required."
This is your loan officer's fault. They either didn't tell you about this up front which would be a mistake on their part, or they didn't know about this, which would be incompetence on their part. It also should have been on your GFE. I'd ask them why it wasn't if I were you.
This is your loan officer's fault. They either didn't tell you about this up front which would be a mistake on their part, or they didn't know about this, which would be incompetence on their part. It also should have been on your GFE. I'd ask them why it wasn't if I were you.
- shapiroamg
- Contributions:3136
As Clay said the fee is typical and the Heloc lender has the right to charge it. You may want to weigh keeping the Heloc open (subord fee and recording fee-for the subordination) vs closing the line.
If you close the line, there is nothing stopping you from getting anotherone after the closing. There may be though, a charge for closing the line early. Know your options.
BTW- What is the rate BofA is offering. There are rumors out there that they are taking forever to process their loans. Stay on top of them.
If you close the line, there is nothing stopping you from getting anotherone after the closing. There may be though, a charge for closing the line early. Know your options.
BTW- What is the rate BofA is offering. There are rumors out there that they are taking forever to process their loans. Stay on top of them.
- Clay Branch, "Georgia Loans"
- Contributions:8819
I don't understand why no similar fee was imposed when I took the HELOC out - even though the bank was aware of my first mortgage (with BoA) and willingly opened the line of credit.
There was no fee when you opened the Heloc because your B of A mortgage was already in 1st position, the Heloc was recorded in 2nd position. When you refinance and payoff the lien in first position, the Heloc moves from 2nd position to 1st position if there is no re-subordination agreement. A re-subordination agreement and fee for it is standard and typical.
There was no fee when you opened the Heloc because your B of A mortgage was already in 1st position, the Heloc was recorded in 2nd position. When you refinance and payoff the lien in first position, the Heloc moves from 2nd position to 1st position if there is no re-subordination agreement. A re-subordination agreement and fee for it is standard and typical.
- Caveat Emptor
- Contributions:501
subordination is the rule that states that in the case of a default, your 2nd mortgage/line of credit WILL NOT BE PAID until BoAs loan is paid in full, if that makes any sense. so I understand where they are coming from.
now, my guess is that it isn't a subordination fee at all, but a REsubordination fee, big difference. they are demanding a fee to essentially refinance your HELOC. have you considered, you know, closing the HELOC and then refinancing, thus eliminating any say the other bank has in your home-ownership dealings?
now, my guess is that it isn't a subordination fee at all, but a REsubordination fee, big difference. they are demanding a fee to essentially refinance your HELOC. have you considered, you know, closing the HELOC and then refinancing, thus eliminating any say the other bank has in your home-ownership dealings?
Subordination fee demand.
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