Tidbits

Back in “the bubble,” if you could fog a mirror, you could get a loan.

Back in “the bubble,” if you could fog a mirror, you could write a loan.

Back in “the bubble,” if you could fog a mirror, you could be the escrow agent on a loan.

Back in “the bubble,” there were a lot of loans and a lot of mistakes.

One of the best pieces of ammunition you can have if you would like a loan modification, is a list of which mistakes may have been made on your loan.  Find a friendly escrow officer, not at the office where you closed the loan, and have them look over your closing documents.

Here are some things we found on a recent trip down bubble memory lane: 

  • The loan application was not signed and dated by the loan officer. Compliance issue.
  • The loan application was not given to the borrower to sign until the day before closing.  Really?  How did that work?
  • The borrower did not authorize the credit check until the day before closing.  That is one heck of a loan company.  They can make application for and fund within 24 hours.  Wow.
  • There were 3 Good Faith Estimates (GFE’s), all dated the same day. 
    •  The first had a rate of 5.25% (below the going rate — teaser, as it is called) with a $700 credit for an appraisal paid for up front.
    • The second had a rate of 8.25% (2.5% above the rate that day)
    • The third had a rate of 8.25% and a charge of $600 for an appraisal.
  • All the GFE’s had enormous fees for the closing attorney.  $50 for email? $150 for courier when all parties were in-city?
  • The appraiser made note on their form that none of the subject properties they used as comparables had sold data within the past 3 years.  Are you joking?  In a rising market, they were trying to manipulate the price into the range which the buyer had contracted for so the sale could go through.

Before you call a HUD counselor or go to Solid Ground (WA state) or another non-profit to help you, take a few minutes to find an escrow agent to help you look at your paperwork.  If they shake their heads in disbelief, know that you will have a little more ammunition on your side when you ask the bank to modify.

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