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got a gfe with a credit to me but...

the closing/lender fees equalled the credit.  It also fell short of all closing costs in the 800 series of the HUD form.  So, in short, I wasn't offered a credit to begin with.  Scam or no scam?  Lenders---you be the judge.  Why did they even waste my time getting my hopes up to considering their gfe to only say at the bottom that I will still have to close the deal with xxxx dollars?  is this michigan for you or what?
  • August 29 2009 - Cassopolis
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Answers (10)

Profile picture for Planners
We would have to see the paperwork to be sure, but here's nothing automatically wrong with what you are describing. We do much the same thing, offering credits in escrow which can cover part or all of a borrower's expenses. We still have to show the expenses on the debit side since they are actually being paid, but we offer as a credit whatever amount we have agreed upon.

As long as the net cost is what they said it woudl be, they are likely doing nothing wrong.
  • August 31 2009
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Can you please be more specific?  It sounds like...

On the GFE, the lender credit DID equal the fees in the 800 section, right?  So basically, the lender credit was paying for the lender fees.

Now you get the HUD and the lender fees in the 800 section were higher than the GFE?  Did you still receive the lender credit?  Was it just the appraisal fee that was different?  How much was the difference between the HUD and the GFE?

You're not looking at the other fees, such as pre-paid items, are you?

I guess you asked why the lender did this, but we don't know what the lender did...maybe if you respond listing the 800 fees from the GFE and the 800 fees from the HUD, it would be easier to figure out what happened...
  • August 31 2009
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Is the three day recision up? If not go to another lender and start the process over. If you sign the recision the current lender has to give you all the fees you paid in back. They will probably cut their fees to keep you from recending the loan.
Everything is negotiable. You are the boss. Remember that.
  • August 30 2009
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Why do folks think that there is a Magic Lender that gets Magic Pricing and can offer a magic loan other lenders can't?
  • August 29 2009
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My suggestion would be to go to the office of the person who gave you the Good Faith Estimate and ask them to explain it. It is much easier to explain across the desk than over the phone or by email. If you meet the person, they can explain each line item, why they structured the pricing the way they did, and they can explain other options. Explain what you want, see if they can do what you want them to do, and let them explain the pricing impact. If they won't meet with you, find someone who will. This sounds like it's more about communication than anything else. 
  • August 29 2009
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It is possible for a ZERO closing cost loan to require cash to close.  For instance, if there is an escrow for taxes and insurance, those items might be reflected as cash to close.  Also, because the way interest is calculated on a mortgage, there is a line item for Prepaid Interest.  In general, a 0 closing cost loan refers to all lender fees and title, but not escrows or other prepaid items, like interest.  Hope this helps.
  • August 29 2009
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There are other items (not closing costs) that can be included in the GFE you were provided.  If there is an escrow for taxes and insurance, those items might show as cash to close.  If this is a refinance, you can typically roll the escrows into the new loan.  Additionally, because of the way mortgage interest is calculated, there could be prepaid interest that is affecting your cash to close.  A zero closing cost loan should mean NO CLOSING COSTs.  However, prepaid items for escrows and interest are typically not absorbed by the lender.  Hope this helps. 
  • August 29 2009
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I would have to see the estimate to make any kind of judgment.  It is true, some unscrupulous lenders will play a shell game to make something sound better than it actually is.

I'm not sure what you are considering as junk fees?  What are these fees and amounts specifically??
  • August 29 2009
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Profile picture for jcerjs
Justin,
this is a refi, worth about 385000. loan 255000. But why offer me a credit on top and then at the bottom I would still have to pay all junk fees that have been jacked up to absorb the credit?
  • August 29 2009
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Most buyers/borrowers will pay their own closing costs.  It is possible for a lender to offer a credit to offset some or all of them. 

In Michigan, property values can be pretty low.  I am not sure what price range you are working with, but if it is less than 150,000 it would be very difficult for a lender to absorb ALL the costs.
  • August 29 2009
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