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Which GFE to believe - broker's or lender's?

I am doing refi with a broker and she gave me GFE. Then I received GFE from the lender and it has a different rate and "origination fee" which is above $6k. The broker is saying that I should ignore lender's GFE because I am doing mortgage with her, not with lender. Is it normal situation? I believe $6k difference would make anybody nervous. :)
  • November 10 2010 - US
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Answers (108)

Do you have the smae 3 Page GFE format from both?

The lender GFE typically will be generated to match what the broker submitted to them.   It certainly should not be ignored.
  • November 10 2010
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What is smae 3 Page?

The rate on the lender's GFE is 0.125% less, but the "origination fee" is huge. The broker is saying that the difference is because the lender's GFE reflects broker's commission. There is a place in the document (1 page above GFE) that states $6k+ "origination fee to broker". The broker says that I should ignore numbers on the lender's GFE because the broker's GFE will supersede the lender's. Is it true?
  • November 10 2010
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I'm sure I will get flamed for this, but ...

... It's  VERY common that on a brokered loan, when the lender sends disclosures, they are wrong. In fact, they are wrong so often that many loan officers (I) tell clients to completely ignore them. If the loan officer is the one generating the GFE, then what they give you is golden. 

That being said, I have NEVER seen the incorrect rate disclosed from the lender, so that is worth investigating. If the disclosures come with incorrect fees or a different APR, I would not worry about it as the loan officer that drafted the GFE is responsible for it and the fact that you are getting disclosures from the lender means they accepted it. The cannot modify it in anyway. 

Advice:

Get clarification on the rate, get clarification on the origination fee, because that should not change either and hold the loan officer to their GFE. What they sent you is king!
  • November 10 2010
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Interesting..... did broker tell you why lender sent you a GFE? It is because lender will fund the loan not the broker, and you have reason to be concerned. The GFE has to match the HUD 1/Settlement Statement that your lender (not the broker) will send to title co. Ask them to have lender send you a GFE without the $6k additional origination fee and at rate broker quoted.  Since that is not likely to happen, I would get a referral to another loan officer and get a GFE to compare. 
There may some confusion of Origination Charge and Orgination Fee, but a competent loan officer/broker should be able to give you a better explanation than what you have received.
  • November 10 2010
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The broker told me that I am doing closing with her, not with the lender. I tried to talk to the lender (PFG), but I have no option to talk to them. When I called them - they told me "you have to talk to your broker".
I received GFE from the lender by email as a part of the huge document with disclosures. The broker told me that this is required by law.
  • November 10 2010
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Sorry, meant to say Same, just a typo.   I was just asking because many brokers are too afraid to issue an actual GFE and rely on things like Initial Fee Worksheet, or Closing Cost Summary, which are not binding documents.

If you have the actual 3 Page version of the GFE from your broker, I would say you are probably OK to follow that, but if you have some other version from the broker, and then the lender GFE tells a different story, I would be suspicious.

  • November 10 2010
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The broker's and lender's GFEs are in the different format. Actually the broker's GFE is not divided by pages. It's like one big page and it has lines numbered 800, 810, ... 900, 1000, etc. When lender's GFE doesn't have this numbers. It starts with "Purpose", "Shopping of your loan", "Important dates", etc.

So I can't compare "page 3".
  • November 10 2010
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I had a feeling this was the case.  

So, look at the lender GFE Box 1 of Page 2.   This is how much your broker is charging you for their service.   From this amount, the lender is probably charging $800-$1000 for their service and the rest will compensate the broker.

The lender/broker might be offering you a credit in Box 2 to pay towards this fee.   The amount of the credit is based on variety of factors and is not a set amount until you have locked your interest rate.  

If you have not locked your interest rate yet, you can ask you broker how much closing cost credit is currently available.   Take that number to offset box 1, and if the adjusted amount is in the range you were expecting from your agreement with the broker, then you can request a lock be executed.
  • November 10 2010
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First of all, your loan officer is an order taker and not a loan officer if they cannot issue a GFE.

I cannot believe Brokers are getting away with this still! 

If you completed an application and gave all of your information, your Broker should have issued you a GFE. A fee sheet with the GFE is fine, but you should have received a GFE as well within 3 days. It should look exactly like the one you received from your broker. (And if it does not then it is the one that is binding anyway). 


In this case, since you did not receive a GFE, What the lender's GFE says is what is in play. Your McLoan officer seems to be feeding you a bunch of bs.

So much for regulation.
  • November 10 2010
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On the lender's GFE Box 1 of Page 2 is $7k+ and then credit of $1k in the box 2, so the total A ("Your adjusted origination charges") is $6k+.
The broker is saying that I should ignore this lender's GFE because she gave me her GFE which supersedes the lender's GFE.
I have locked the rate with the broker, she sent me the confirmation letter. How should it look like? The rate on the broker's GFE is 0.125% higher than on the lender's GFE, but no origination fee, there is only lender's "underwriting fee" $795.
  • November 10 2010
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One more interesting thing. I didn't give approval for appraisal service, but I see that my credit card is already charged for appraisal fee (I gave my credit card number only for credit report fee). The appraisal guy called me today, but I told him that I am not ready to do appraisal before I know all my costs for sure.
  • November 10 2010
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Your broker has not given you a GFE.   A GFE is a 3 page document, anything else you are provided is not a GFE.

On your lock confirmation, does it indicate a lock price?   Knowing the lock price and the loan amount, can determine the accuracy of the lender GFE.   It is possible the lender GFE was issued prior to lock.  In fact, it is likely this is the case if your broker locked your rate above the rate they initially estimated when they file was submitted to the lender.

This last bit of information should help to determine exactly what you should expect at closing.

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I am far less tolerant that Justin and I advise that you have a serious discussion with your "loan officer". None of what you described is acceptable. I guess where Justin is trying to help you resolve your situation so you know where you stand, I am trying to alert you to the fact that the person you are working with is a moron.

If you happen to be in California, you should call Justin and have him evaluate your situation for you, he's an excellent source of information.
  • November 10 2010
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Thanks HUGD, certainly more red flags than the 2008 Olympics here, especially about a rushed unauthorized appraisal.

I like to give the benefit of the doubt whenever possible, but all signs here lead to a mixture of incompetence and deceipt.  The latter being the first ingredient listed most likely.
  • November 10 2010
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If I decide not to proceed with them - how can I get appraisal fee reversed?
  • November 10 2010
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Dundi, Have you signed an "intent to proceed" or something similar? The language should be similar to:

"The undersigned borrower certifies the following:
•    I/We were provided with an initial Good Faith Estimated within 3 business days of the application date; 
•    My/our signature below confirms our intent to proceed with the loan covered by the issued Good Faith Estimate and, 
•    I/We were not charged any fee prior to receipt of the Good Faith Estimate, other than a reasonable credit report fee"

If you did not sign such, or any other similar document, I would certainly question their authority to proceed with your loan. How to go about getting the appraisal fee back is another story that frankly, I don't have an answer to.
  • November 10 2010
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Call your credit card company and tell them you did not authorize the charge, reverse it.
  • November 10 2010
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HUGD, they may have signed that form but the worksheet served as the initial "GFE", same old games.  
  • November 10 2010
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The appraisal was not performed yet, so how can they charge me if I refuse to do appraisal?
  • November 10 2010
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I agree Clay, they may have been "duped" into thinking it was a GFE, but the worksheet cannot substitute for a GFE even if they signed the form. If they did not receive one (an actual GFE)  within 3 days of their application and they now want out, they can do so because the lender / broker / McLoanOfficer, clearly violated RESPA; probably TILA too if we were to investigate further. 

Maybe you should just send them a link to this thread and see what they say.
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The appraisal was not performed yet, so how can they charge me if I refuse to do appraisal?

They already charged you, you now have to get it reversed. 

they may have been "duped" into thinking it was a GFE 
That's what I'm thinking. 
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This is email they sent me after I submitted my application:

"The next step in the loan process will be as follows.....
We will submit the loan to the lender. They usually take about 48 hours to give us a conditional approval. This means they may ask for a few things in order to close the loan (the appraisal will be one of them). You will receive an email from the lender with the standard disclosures I mentioned when we did the application over the phone together. It is NOT required for you to sign and/or return any of those documents as they will NOT be accurate. The lender is required to send out disclosures showing the maximum amount our company can make on your loan. The documents you received from me will supersede the ones sent by the lender. Your lender is Provident Funding Group (PFG). I will however need you to follow the links provided by them in order to complete the registration process, and allow me to order the appraisal."
I am confused in the terminology. Do I understand correctly that even if they are brokers, not actual lenders - they are required by law to provide GFE 2010 within 3 days?
  • November 10 2010
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Yes, 3 days. 
  • November 10 2010
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" Do I understand correctly that even if they are brokers, not actual lenders - they are required by law to provide GFE 2010 within 3 days?"

It could come from either, but has to be within 3 days. If what you received from the lender was within 3 days, that is the document that is binding. Your broker never gave you a GFE it sounds like. For them to tell you to ignore the GFE from Provident is nonsense in this case. 

I am accustomed to the broker issuing their GFE and then the lender accepts it and issues the same to the borrower. In this scenario that you describe, the broker just issued you a fee worksheet that means nothing and is asking you to blindly commit to their document and ignore the lender's that is binding. You should really have someone look at your situation more closely to advise you properly. What state are you in?
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I am in Florida. The broker told me that I have not signed anything with PFG and I will be doing closing with the broker's company, so their GFE (which is actually fee worksheet) will supersede the PFG's GFE. Yes, it looks suspicious to me.
How should the lock in confirmation look like? They sent me just a letter with locked rate from them, not from the lender.
  • November 10 2010
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dundi, 

Their "GFE" would in fact supersede the lender's if in fact they gave you a GFE. If they just clerked your application and passed it along to the lender and the lender issued the GFE, then the lender's GFE is what counts. A fee worksheet is toilet paper and should only be used for the purpose intended. Don't get me wrong, a fee worksheet is important in showing you your costs you close, payments, etc, but without a corresponding GFE that matches; it's useless and them telling you otherwise is a lie.
  • November 10 2010
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Be sure not to let the appraiser have access to your property.  They will not be able to bill the lender for an appraisal so lender should credit your credit card.  In the meantime I would do as Clay suggested and dispute the charge with your credit card company to get it reversed.
  • November 11 2010
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dundi, if you are still reading this thread could you answer a few questions?
What is your loan amount, loan to value, and credit score?
Did you sign about 34 pages of documents?
What is the lock date and what rate did you get from the broker?
Is this Broker on Zillow?
  • November 11 2010
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Like you Dundi, I would  be very concerned to continue doing business with this firm. To the best of my knowledge a Lender's GFE is what your Settlement will be based upon. This is certainly not something to be ignored. This could be far more costly than an appraisal fee, should you not get that reversed, although that should occur.

Best wishes, Rudi
  • November 11 2010
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The lender is required to send out disclosures showing the maximum amount our company can make on your loan.

This is utter nonsense.   I'll translate it.

The lender is sending out disclosures with the amount of money I told them that I intend to earn on your loan.  

  • November 11 2010
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