What information / services should be offered a mortgage broker?

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Are they responsible for the good faith estimate and truth in the documents of housing? If yes, when will they be provided? What other documents need to be offered? Our broker asked us a preliminary estimate. In my experience it is usually paid when the loan ends? Whether it’s typical to pay in advance? Also, I heard that the broker can not legally guarantee the letter of prior approval, it must come directly from the lender. Is this correct?
At closing, I could not find reference. Citi has bought one of the principal of the loan, which she did and now we found that the amount you’re charging for the service without my consent. I want to solve it now!

  1. Reply
    February 6, 2011 at 2:17 am

    Go here http://www.realestateformnm.com/ResearchLink.html prepare a pot of coffee and see all that has to be looked at and provided.

  2. Reply
    February 6, 2011 at 2:26 am

    The broker is responsible for a good faith estimate, truth in lending, and all disclosures in the beginning when the file is being submitted. Many lenders allow this to be signed at escrow but you certainly can request them.

    Appraisals are normally paid for by the borrower at the time of the appraisal…it is your appraisal…you pay for it. I do cover appraisals for my past clients but it is not customary to expect a broker to pay these costs and assume you will close escrow.

    Pre-approval letters can be legally drafted by a broker. Unfortunately, many brokers issue them prior to actually getting an approval from the lender. In this case they should be issuing a pre-qualified letter…not a pre-approval.

    For more information on mortgage qualifying and credit maintenance check out my blog.

  3. Reply
    February 6, 2011 at 2:55 am

    On the appraisal my lender just took a credit card number to hold until closing. They will charge me in the event the loan does not close.

  4. Reply
    February 6, 2011 at 3:28 am

    many brokers do ask ou to pay for the appraisal upfront so they aren;t stuck with the cost if you back out. A GFE & TIL are provided w/ your mortgage application as they can not start the process with the lender without your signature on it. Take it upon yourself to copy everything you sign. As for the pre-approval letter – yes and no. I wouldn’t worry about it too much though, b/c they wouldn’t put a pre-app together for you with out already knowing what you can/can’t afford. Also the real estate agent will accept it anyway. If you’d like additiona l information with no obligation to you, contact my old company http://www.terrafinancialgroup.com or call Susan at 215-676-8844. They’re awesome people & will help you with whatever you need. They are licensed in PA, NJ, CA< MD, NY and maybe a few others - I don't know - I haven't worked there in a while

  5. Reply
    February 6, 2011 at 3:58 am

    The Good Faith Estimate should be given at the earliest opportunity, usually within a few days of having all the information needed to make an educated guess as to your expenses. Sometimes that isn’t until nearer closing than borrowers like, but some properties have tax situations that can be confusing.

    The Truth in Lending comes at closing. It shows you the effect of prepaid items. It’s a very scary form, but if you read the line above where you sign it, all the signature means is that you’ve seen it and been given a copy. You should have it explained to you, but it doesn’t contain any promises on your part, so it’s really not the most important document you see at closing.

    The appraisal is usually paid for up front. That fee goes to someone outside of the Lender’s control, and they want their money whether it closes or not, so to keep from being on the hook for it on loans that don’t close, the borrower pays it up front and it isn’t refundable.

    The broker can provide a pre-approval letter, there’s nothing illegal about it, but it doesn’t carry the weight that a similar letter from a Lender has. They can write it, and you can show it to a prospective Buyer, but a smart Seller will recognize that one says “we as Broker are of the opinion that someone would lend them money” but the other says “we as a lender would lend them money.”

    A letter from a Broker doesn’t impress Buyers much and it’s legal but generally pointless.

    Only a real Lender can issue a bona fide Mortgage Commitment, which is far more specific and binding.

  6. Reply
    February 6, 2011 at 4:47 am

    I worked with a broker in Pennsylvania. The company was called Drake Mortgage. Christina was my point of contact. She did a fabulous job for me. I always felt at ease and my questions were always answered. You can reach her at 800-339-4747. The company has been in business for over 20 years. I hear that it is unusual for a broker to be in business that long. If you are looking for a mortgage in Pennsylvania …… give her a call.

  7. Reply
    February 6, 2011 at 5:11 am

    If you did not receive a GFE (good faith estimate) and TIL (truth in lending) then your broker has violated RESPA and that is a huge fine. I would recommend working with someone else now before you close and see astronomical closing costs. They should have been provided within 3 business days of pulling your credit. The appraisal issue now that is not uncommon as if the loan does not close then the loan officer is responsible for the fee. Your are correct as the lender is the only one who can give a pre-approval but your loan officer can issue a pre-qualification and that is determined by pulling your credit and analyzing your debt, income and credit scores. I hope this helps you and answers your questions but if you have any further questions or need any assistance feel free to email me.

  8. Reply
    February 6, 2011 at 5:48 am

    Your loan balance is more than 80% of the appraised value.. To fix this, you would need to have a first loan for 80% and a second loan (at a higher rate) for the remaining balance.

  9. Reply
    February 6, 2011 at 6:42 am

    You are automatically charged that if you put down less than 20% down on the property. It is insurance to cover the loan for the bank. You don’t get anything from that policy. Once you have 20% of equity in the property ask them to remove the charge.

  10. Reply
    February 6, 2011 at 6:56 am

    PMI is a type of insurance that benefits the lender in the case of your default. It usually is required if the LTV is greater than 80 % at the time of purchase. If should be mentioned in the loan documents. The premium is normally paid annually but added to the monthly mortgage payment.

    My understanding of a mortgage that is sold is that the buyer of the mortgage cannot make modifications to the mortgage.

    I would look carefully at the loan closing papers to see if there is any mention of a year of “Private Mortgage Insurance” or “PMI” and analyse your monthly payment to determine what the components are: Principal, interest, taxes, property insurance, PMI (?). If you have difficulty, I would suggest calling the title company that did the loan closing and ask them to go through the closing documents with you.

    Depending on when Citi purchased the loan from Principal, it could have been that Principal didn’t make a PMI payment to the company because it is only due once a year, but Principal should be able to tell you whether a monthly PMI premium was a part of your payment.

    If it is determined that there was no PMI on the loan, I would write a letter to Citi, sending it certified requiring a signature for receipt, and explain that to them. I would also make sure to not pay any PMI in your monthly payment.

    Good luck.

  11. Reply
    February 6, 2011 at 7:20 am

    What type of loan did you do? That’s why a lot of the %100 financing loans are broken down in an 80% (one loan) 20% (2nd), to eliminate the PMI hassle. If you have less than 20% down on a home, or the equity situation is under 20%, you have to pay PMI. Maybe you should refinance with a lender who will disclose this to you and explain everything and what your options are

  12. Reply
    February 6, 2011 at 8:03 am

    If you have mortgage insurance, it was disclosed to you at your closing.

    If you don’t like it, call Citi and complain. Get your closing documents out before you do.

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