Posted by Calnotary on 12/12/05 9:07am
Msg #81902

Redraw Fee?

I been looking on the HUD a redraw fee; And then I ask the borrower if another notary
came and if this is the second time you are signing the same loan, and they reply is no.
Lenders probably think that their loan is so bad and that the borrower will cancel and they are
anticipating a redraw?

Anybody else seen this?

Reply by MB_AZ on 12/12/05 9:15am
Msg #81903

No haven't seen that. Next thing they will start charging on the HUD is a cancellation fee!

Reply by BP/WV on 12/12/05 10:10am
Msg #81909

I have seen that one time. It was for a borrower that was very thourough in going over the HUD. He voluntarily told me that he was being charged a redraw fee because he wanted to add another payoff to the loan after the 1st HUD was created.

Reply by Calnotary on 12/12/05 10:24am
Msg #81915

A 350.00 dollar redraw fee in this case.

Reply by PattiCA on 12/12/05 11:44am
Msg #81938

It could be a situation where after the docs were drawn, the borrower decide to change the terms...for example, there may have been a pre-payment penalty originally, but the borrower decided that he didn't want the pre-pay on the loan. The docs would have to be re-drawn and the lender could charge a fee for the change. This is not all that unusual.

Reply by ReneeK_MI on 12/13/05 4:31am
Msg #82103

Redraw fees are sometimes charged by lenders and/or title agent. Sometimes, it's the mtg broker, lender or title agent who causes the redraw, not only the borrowers.

In my experience, it is often used to 'discipline' a frequent offender, or someone who was a particular PITA, as it is a discretionary fee no matter who's charging it. It can be presented as "policy" and then NOT charged, and thus used as a marketing tool as well. ("Well, you know, normally we charge on these, but for you we'll forego the added fee ...")

When it's NOT caused by the Borrower's own actions, it usually sparks a conversation that ends with the broker cutting his fee by an amount equal to the re-draw fee. If that conversation takes place at the table, the broker was probably holding his breath and crossing his fingers that it would go unnoticed.