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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 126962  
Subject: Choosing your Lender by the Fees Date: 10/2/2001 12:28 AM
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Recommendations: 8
Hi Fools,

Thought I'd drop some nasty wisdom in on my favorite board members. Some of you may remember a post I made a little while back about the U.S. District Court allowing lenders to add profit to the individual 3rd party fees of the transaction? (Like appraisals, credit reports, etc.)

Here's another article by one of our favorite syndicated columnists about the issue as well...
http://www.washingtonpost.com/ac2/wp-dyn?pagename=article&node=digest&contentId=A41384-2001Apr20

What I'd REALLY like to expose here is this;

Many otherwise Foolish Mortgage Shoppers attempt to get a firm grip on rates and fees prior to committing to their particular lender, loan officer, banker, credit unioner, website, etc. This is another set-up for rape-age of Johnny Lunchbucket.

You see, many of the seperate 3rd party closing cost fees MIGHT be reduceable or eliminable entirely... but it depends on many factors that a lender will have no way of knowing until they get themselves elbow-deep into your financials, credit, and the potentially the property itself.

You may remember a recent post about eliminating or reducing appraisal fees (anywhere from $250 - $600,)
http://boards.fool.com/Message.asp?mid=14805315&sort=recommendations

Thus... just as in the example here;
http://boards.fool.com/Message.asp?mid=14805315&sort=recommendations

...when Johnny Lunchbucket calls around trying to gather Good Faith Estimates from lenders in advance of divulging all his info and getting all the necessary credit and income verifications done, he'll be played for the same game of "lowball quote, hook 'em in, and squeeze him up as we go, boys!"

Once again, in most cases you'll only find out if you actually got a good deal AFTER it's too late to change (without incurring additional expense, delays, or losing a property deal.)

Insisting on choosing by the numbers, and failing to do the due diligence and choosing based on the LOAN OFFICER HIM/HERSELF will hang johnny out for the wolves almost every time.

Best Plan;
1) Find someone you can trust, who comes well recommended by satisfied clients,
2) Ask in advance that you be provided with ACTUAL 3rd party charge invoices at closing (so the L.O. knows you'll be watching,)
3) Expect initial GFE's to be "all over the place" on fees until the L.O. gets your specifics nailed down, and you're at the MOST 3 weeks from closing. Remember... the quality of the professional will determine how good your deal.

LOTS of people are being screwed blindly because they are assuming they can get themselves the best deals online. Right now there are VERY few competitive deals at websites. The lenders are playing against the public's assumptions and ignorance.

Fools Beware!

Dave Donhoff
P.O.'d Mortgage Fool
(seeing lots of people suckered lately!)
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