Real Estate

Protect yourself from a home loan closing delay

The biggest problem in any real estate or mortgage transaction is getting the loan to close on time as scheduled. To a large extent, a timely closing is how both buyers and sellers measure a successful deal. Most last minute closing delays are generally out of the buyers or sellers’ control, any delay in closing is what sticks in their mind.
The Last minute or late delivery of lender documents to an escrow agent, all too often, results in the closing being delayed. Most of the time it’s not the escrow agent or title companies fault. It’s the lender or loan officer’s lack of proper planning ahead to meet the closing deadline. To them, the loan is just another file.
We can’t tell you how often have we heard a loan officer calling the client and real estate agent last minute to say we need a couple of more days’ extension because mortgage documents are running late? As if it’s no big deal to the buyer or seller. The movers are scheduled, plane tickets are in hand – and it’s no big deal! Or worst yet, your home purchase is the first transaction inline that needs to close on time. If your transaction doesn’t close on time, it will affect the outcome of every other transaction to follow down the line. You won’t find too many happy people when that call comes in.
At Mortgage Loan Inspection®, we always recommend that the buyer of a property requests a copy of the HYPERLINK “http://www.hudclips.org/sub_nonhud/html/pdfforms/1.pdf” \t “_blank” \o “HUD-1″HUD-1 and Mortgage Note a couple of days before closing. Let the closing agent, lender and real estate agent know you’ll be requesting a copy of the HUD-1 and Mortgage Note for review early on in the purchase and subsequent mortgage loan transaction. Mistakes, and more often surprises at a closing, are not uncommon.
Sometimes it’s hard to obtain a HUD-1 or Note prior to closing, especially if the lender is late getting the docs to escrow while the escrow (closing) agent is racing to meet the closing deadline. A lot of closing agents don’t routinely send a final draft of the settlement statement (the HUD-1 and Mortgage Note) out to the real estate agent. We suspect this is because real estate companies prefer their agents not review HUD-1’s for errors and thereby don’t assume responsibility for accuracy.
Mortgage Loan Inspection® requests that all our clients have a “Subject to” clause inserted in the original purchase and/or sale agreement stating that “Closing will not occur until after the buyer has received a copy of the HUD-1 and Mortgage Note to review 1 day (24 hours) prior to the closing”.
When it comes to real estate transactions, surprises at closing table are about as welcome as food poisoning. Getting everything you can in order prior to closing is your best protection and insurance for a smooth and timely closing.
1025 W. Glen Oaks Lane 262.241.1234 Office
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Mequon, Wisconsin 53092 HYPERLINK “http://www.mortgageloaninspection.com”www.mortgageloaninspection.com
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MORTGAGE LOAN INSPECTION®
Consumer Protection Agency

Unethical broker/lender Practices

Rate Lowballing

Unethical loan providers deliberately quote a price on the phone that is too good to be true. As the loan approaches the closing date, the low price disappears. Loan providers cannot legally be held to their quotes since rates fluctuate every day. Unethical providers can hide behind a big smoke screen of “market fluctuations”.

Of course, when real mortgage rates do rise, unlocked loans rates can legitimately rise.
To protect yourself from lowballing you should:

Get the rate quote in writing.
Discuss locking the rate ASAP. If the provider has no intention of honoring the rate, discussing a rate lock will make him/her very nervous. This is one of the reasons we generally recommend locking your rate ASAP
Get the lock in writing. The provider should be willing to lock your rate as soon as you have been qualified and give it to you in writing.
Monitor rate benchmarks, such as the 10-year Treasury note and mortgage averages. If benchmarks are not rising, generally neither should your mortgage rate.
Educate yourself, ask a lot of questions, and follow your instincts.

Making Your Credit Score Seem Worse Than It Is

Know your credit score and how it will affect loan terms. It’s a good idea to talk about your credit score, you’ll start to get a feel for the impact your score will have on a mortgage loan. Avoid lenders who make your credit score seem worse than it is.

Marking Up Third Party Fees

Charging the customer more than it actually costs the broker/lender. Third Party Fees are not supposed to be marked up by the broker/lender. Example: The average cost for a Tri-merged individual credit report is $12.50 not $50.00 as they would have you believe.

Ask your broker/lender tough questions

You need to know about the lender’s mark-up and other fees. Most third-party lenders add a margin to the market rates. That’s how they make their money. The mark-up isn’t unethical, but the amount may be. If your lender isn’t willing to disclose his margin or other fees, you need to find another lender.

MORTGAGE LOAN INSPECTION®
Consumer Protection Agency