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.