whomper Posted January 29, 2009 Share Posted January 29, 2009 (edited) I am representing a friend of mine and his wife as the buyers realtor in a home purchase. We are in attorney review right now. My friend works for the Port Authority in NY and he called the credit union to advise him on where to go for a mortgage. They sent him to a website that I dont have at the moment. Long story short he is putting 10% down and this underwriter locked him in to a 4.9 30 year fixed and the guy is only charging him 750 dollars for his services. He gave my friend a good faith estimate and a formal proposal . My friend asked him flat out about 10 times if there were any back end fees or points that are going to creep up and kick him in the ass during this process and the guy is saying absolutely not. When he sent the good faith estimate he put zeros next to point payed by borrower and all of that. He claimed that they have an arrangement with a particular bank that allows them to do this. My friend locked in yesterday. Any other mortgage person he showed this to said he is going to get nailed somewhere down the line. What do you think ? Is this deal too good to be true and do you forsee a backend fee showing up somewhere down the line ? Edited January 29, 2009 by whomper Quote Link to comment Share on other sites More sharing options...
sunysteelfly76 Posted January 29, 2009 Share Posted January 29, 2009 Maybe the $750 is just the fee for his services in addition to the normal closing cost? Quote Link to comment Share on other sites More sharing options...
whomper Posted January 29, 2009 Author Share Posted January 29, 2009 Maybe the $750 is just the fee for his services in addition to the normal closing cost? Yeah. The guy made that clear. The 750 is for his services which my friend has no problem with but he is worried about a back end fee or points that the guy is saying are not going to happen. Quote Link to comment Share on other sites More sharing options...
Square Posted January 29, 2009 Share Posted January 29, 2009 As far as I know, there is no guaranteed points that you can run into (they are a complete option to prepay interest). From what I know about closing costs, the good faith estimate is required because they can only estimate certain fees. Basically, some places have to use 3rd hand parties for certain sections. E.g. they can only estimate what the title insurance fee is going to be if they don't do it in house. Now, you can ask your mortgage broker to guarantee their fees based on the good faith estimate. That way his fee doesn't move at all. 3rd party fees are a little tough for this person to negotiate since he doesn't own those businesses. I'm usually the guy that says if it sounds too good to be true, than it is. But, if your guy has researched as well as he can and has come up with nothing than it might be worth a shot. Just make sure he can back out last minute if he gets hit with a bunch of higher costs. As long as he is pre-approved with another lender than he might be able to save his bacon if it all goes south in the end. It might push his closing date back a couple weeks but it could be worth it. Other option is that he ask for the names and #s of the last 3 mortgages he has worked on and see if it is ok to interview them. If he starts acting weird than that may be a clue. GL> Quote Link to comment Share on other sites More sharing options...
Missoula Griz Posted January 29, 2009 Share Posted January 29, 2009 Yeah. The guy made that clear. The 750 is for his services which my friend has no problem with but he is worried about a back end fee or points that the guy is saying are not going to happen. What date was his loan locked? How many days is the lock good for? What are his credit scores? What is the loan amount? Give me this info and I can give you some insight. Quote Link to comment Share on other sites More sharing options...
whomper Posted January 29, 2009 Author Share Posted January 29, 2009 What date was his loan locked? How many days is the lock good for? What are his credit scores?What is the loan amount? Give me this info and I can give you some insight. Locked in on 1/27 good for 60 days Credit scores for both he and his wife 750ish 325K loan amount Quote Link to comment Share on other sites More sharing options...
Missoula Griz Posted January 29, 2009 Share Posted January 29, 2009 (edited) Locked in on 1/27 good for 60 days Credit scores for both he and his wife 750ish 325K loan amount That is a pretty skinny loan for any lender to offer on last Tuesday. Rates were a little better that particular day. Obviously, the lender is covering the closing costs from the SRP they will receive from whoever they sell the loan to. The 60 day lock would by my biggest concern. He may be floating the market, not yet locking the loan. There is a gamble there, but one I have taken in the past. Of course, I have had to pay out of my own pocket when the market turned on me. I would ask the lender for a copy of the lock agreement from the investor. The lock should be specific to subject property, loan amount, borrower and rate. It will reflect the expiration date of the lock as well. If this pans out, I would feel pretty comfortable going forward. Good luck. Edited January 29, 2009 by Missoula Griz Quote Link to comment Share on other sites More sharing options...
Ramhock Posted January 29, 2009 Share Posted January 29, 2009 That is a pretty skinny loan for any lender to offer on last Tuesday. Rates were a little better that particular day. Obviously, the lender is covering the closing costs from the SRP they will receive from whoever they sell the loan to. The 60 day lock would by my biggest concern. He may be floating the market, not yet locking the loan. There is a gamble there, but one I have taken in the past. Of course, I have had to pay out of my own pocket when the market turned on me. Some brokers will not eat the fee, sighting various bullshat reasons for what had to change, points or rate due to them playing the market. I would ask the lender for a copy of the lock agreement from the investor. Good advice The lock should be specific to subject property, loan amount, borrower and rate. It will reflect the expiration date of the lock as well. If this pans out, I would feel pretty comfortable going forward. Good luck. Quote Link to comment Share on other sites More sharing options...
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