Posted on: 23rd Nov, 2009 11:48 pm
My home buying adventure has been turning more and more into a nightmare.
I am purchasing a short sale house so I have until december 11th to close. My interest rate lock expires on the 5th.
One of the big issues I have been dealing with is my broker's evasion in equivocation regarding negotiating her high closing costs. Initially the seller was going to pay for some of the closing costs but isn't a sure bet and is currently being negotiated. Since I need to close quickly, my broker knows she has me between a rock and a hard place.
Going through the loan docs I noticed something strange:
My GFE is @5% interest and lists 2 origination fee points and $1800 in junk fees with no discount points. My credit score is about 790 and I have low debt to income.
My TIL is @ 5% interest and lists only 1 origination fee point and no junk fees.
Which document is the one to go by and how could they be so different? Isn't the lender required by law to disclose all the fees on the TIL even if the seller might agree to share some of the cost? I really feel like I am being jerked around here a bit. Can anyone weigh in? Thanks.
Andres.
Thanks everyone for being so helpful.
I am purchasing a short sale house so I have until december 11th to close. My interest rate lock expires on the 5th.
One of the big issues I have been dealing with is my broker's evasion in equivocation regarding negotiating her high closing costs. Initially the seller was going to pay for some of the closing costs but isn't a sure bet and is currently being negotiated. Since I need to close quickly, my broker knows she has me between a rock and a hard place.
Going through the loan docs I noticed something strange:
My GFE is @5% interest and lists 2 origination fee points and $1800 in junk fees with no discount points. My credit score is about 790 and I have low debt to income.
My TIL is @ 5% interest and lists only 1 origination fee point and no junk fees.
Which document is the one to go by and how could they be so different? Isn't the lender required by law to disclose all the fees on the TIL even if the seller might agree to share some of the cost? I really feel like I am being jerked around here a bit. Can anyone weigh in? Thanks.
Andres.
Thanks everyone for being so helpful.
A good faith estimate or GFE should be provided by a mortgage lender as required by Real Estate Settlement Procedures Act (RESPA). The GFE should include fees and costs associated with your loan. This estimate should be provided within 3 business days of applying for a loan. Some of the fees mentioned in GFE are title charges, loan fees, government charges, reserves, fees to be paid in advance as well as other additional charges.
TILA or Truth in Lending Act is designed to protect consumers in any kind of credit transactions. As per this Act, the lender/creditor is required to disclose the terms and conditions of the loan as well as other costs. The lender must inform the borrower about the annual percentage rate (APR). Apart from this, it should also include the origination fees and discount points. I would suggest you to contact your lender and ask him to clarify the fees and other details.
TILA or Truth in Lending Act is designed to protect consumers in any kind of credit transactions. As per this Act, the lender/creditor is required to disclose the terms and conditions of the loan as well as other costs. The lender must inform the borrower about the annual percentage rate (APR). Apart from this, it should also include the origination fees and discount points. I would suggest you to contact your lender and ask him to clarify the fees and other details.
Well the TILA has the APR listed as just under 5.04
That's way below what the APR would be if you added up the fees listed in the GFE.
That's way below what the APR would be if you added up the fees listed in the GFE.
All the fees listed on the GFE are not required to be included in the calculation of the APR noted on the TIL. All the broker fees must be included.
It is difficult for us to tell what the APR should be.
The TIL does not "list" any fees.
If two points were included and nothing else, the APR would be 5.17% You are noting the TIL shows 5.04 and that appears to be definitely incorrect, unless you are doing and ARM, then it could be correct.
Under current regulations, if your final APR is more than .125% higher than your last disclosed APR, you may not close until you receive the corrected APR and then must wait 3 working days to close. That is just another fly in the ointment as you get closer to closing.
You have your work cut out, as you already know. You are negotiating and sometimes negotiating with people who are not responsive. Go up the chain of command until, you get answers.
It is difficult for us to tell what the APR should be.
The TIL does not "list" any fees.
If two points were included and nothing else, the APR would be 5.17% You are noting the TIL shows 5.04 and that appears to be definitely incorrect, unless you are doing and ARM, then it could be correct.
Under current regulations, if your final APR is more than .125% higher than your last disclosed APR, you may not close until you receive the corrected APR and then must wait 3 working days to close. That is just another fly in the ointment as you get closer to closing.
You have your work cut out, as you already know. You are negotiating and sometimes negotiating with people who are not responsive. Go up the chain of command until, you get answers.
Thanks John,
Excellent advice as always.
Based on the regulations, it seems like my TILA does not follow the regulatory requirements. Do you happen to have a citation?
Excellent advice as always.
Based on the regulations, it seems like my TILA does not follow the regulatory requirements. Do you happen to have a citation?
The Truth-in-Lending Act, which is Title I of the Consumer Credit Protection Act, was enacted in 1968, implemented by Regulation Z issued by the Board of Directors of the Federal Reserve System.
The APR must be disclosed within 1/8 of 1% of the actual APR determined in a regular transaction (1/4 of 1% for ARMs).
It was further amended by the Housing and Economic Recovery Act, the Mortgage Disclosure Improvement Act and the Emergency Economic Stabilization Act of 2009.
If the final APR varies by more than 1/8 of 1% more than the last APR provided, the lender must disclose all the changed terms in a corrected disclosure and the corrected disclosure must be received by the consumer no later than three business days before consummation (closing)(business days do not include Sundays or holidays.
Perhaps that is what you are asking for?
Good luck
The APR must be disclosed within 1/8 of 1% of the actual APR determined in a regular transaction (1/4 of 1% for ARMs).
It was further amended by the Housing and Economic Recovery Act, the Mortgage Disclosure Improvement Act and the Emergency Economic Stabilization Act of 2009.
If the final APR varies by more than 1/8 of 1% more than the last APR provided, the lender must disclose all the changed terms in a corrected disclosure and the corrected disclosure must be received by the consumer no later than three business days before consummation (closing)(business days do not include Sundays or holidays.
Perhaps that is what you are asking for?
Good luck