Posted by caryn keller on 12/3/06 6:43pm
Msg #163668

unethical deals

What is going on lately? I have brought over papers that are not even close to what the borrower agreed to: as far as interest rates, terms of the loan (fixed or adjustable). I have seen more this month? What are these brokers thinking?

Reply by DD/OR on 12/3/06 6:56pm
Msg #163671

I know...me too. I've experienced more cancellations lately because of this kind of thing. They just throw the deals against the wall and hope it sticks. Unscrupulous is the word.

Reply by Larry/Ca on 12/3/06 7:08pm
Msg #163674

I really do not understand how rates can be changed from the preliminary disclosure docs required by law from the lender to proceed with loan. When borrowers say this to me I always think that they did not really look at the preliminary docs, and that they were going by a phone conversation early on in the application process.

Larry

Reply by DD/OR on 12/3/06 7:47pm
Msg #163677

What preliminary docs? The only docs they see is the ones we bring them. They believe what their LO tells them via telephone. And the LO lies. The BO main gripe is the fact that they don't see docs before the signing.

Reply by Larry/Ca on 12/3/06 8:58pm
Msg #163683

I stand corrected, after re-reading the TILA where initial disclosures are discussed, it appears that ONLY those with rate locks would be required to receive these disclosures within 3 business days of their applications. I am not an attorney and a correct understanding of written law is sometimes very difficult for me. I have read others refer to this initial disclosure law and my own lender sent me these initial disclosures, stating they were required by law, which led me to believe that everyone received them. My apology.

Larry

Reply by PAW on 12/3/06 9:30pm
Msg #163686

RESPA has requirements too

One of the purposes of RESPA is to help consumers become better shoppers for settlement services. RESPA requires that borrowers receive disclosures at various times. Some disclosures spell out the costs associated with the settlement, outline lender servicing and escrow account practices and describe business relationships between settlement service providers.

Good Faith Estimate of Settlement Costs. RESPA requires that, when you apply for a loan, the lender or mortgage broker give you a Good Faith Estimate of settlement service charges you will likely have to pay. If you do not get this Good Faith Estimate when you apply, the lender or mortgage broker must mail or deliver it to you within the next three business days.

Be aware that the amounts listed on the Good Faith Estimate are only estimates. Actual costs may vary. Changing market conditions can affect prices. Remember that the lender's estimate is not a guarantee. Keep your Good Faith Estimate so you can compare it with the final settlement costs and ask the lender questions about any changes.

Servicing Disclosure Statement. RESPA requires the lender or mortgage broker to tell you in writing, when you apply for a loan or within the next three business days, whether it expects that someone else will be servicing your loan (collecting your payments).

Affiliated Business Arrangements. Sometimes, several businesses that offer settlement services are owned or controlled by a common corporate parent. These businesses are known as "affiliates." When a lender, real estate broker, or other participant in your settlement refers you to an affiliate for a settlement service (such as when a real estate broker refers you to a mortgage broker affiliate), RESPA requires the referring party to give you an Affiliated Business Arrangement Disclosure. This form will remind you that you are generally not required, with certain exceptions, to use the affiliate and are free to shop for other providers.

HUD-1 Settlement Statement. One business day before the settlement, you have the right to inspect the HUD-1 Settlement Statement. This statement itemizes the services provided to you and the fees charged to you. This form is filled out by the settlement agent who will conduct the settlement. Be sure you have the name, address, and telephone number of the settlement agent if you wish to inspect this form. The fully completed HUD-1 Settlement Statement generally must be delivered or mailed to you at or before the settlement. In cases where there is no settlement meeting, the escrow agent will mail you the HUD-1 after settlement, and you have no right to inspect it one day before settlement.

Escrow Account Operation & Disclosures. Your lender may require you to establish an escrow or impound account to insure that your taxes and insurance premiums are paid on time. If so, you will probably have to pay an initial amount at the settlement to start the account and an additional amount with each month's regular payment. Your escrow account payments may include a "cushion" or an extra amount to ensure that the lender has enough money to make the payments when due. RESPA limits the amount of the cushion to a maximum of two months of escrow payments.

At the settlement or within the next 45 days, the person servicing your loan must give you an initial escrow account statement. That form will show all of the payments which are expected to be deposited into the escrow account and all of the disbursements which are expected to be made from the escrow account during the year ahead. Your lender or servicer will review the escrow account annually and send you a disclosure each year which shows the prior year's activity and any adjustments necessary in the escrow payments that you will make in the forthcoming year.

[Source: Accurate Home Loans, Inc.]

Further, there may be some state required disclosures.

Reply by Susan Fischer on 12/3/06 10:42pm
Msg #163689

Uh oh, according to this, I may have erred in *complying*

with instructions to have BOs back-date initial disclosure docs. Sometimes there is an insert in the printed docs to date the following a previous date. Sometimes there the directive is under 'special instructions' on the confirmation.

Often BOs comment on 'papers' they have received, but rarely are they at the table when we sign; very few comparisons.

Lately, I have seen a new form stating the final terms are different, and rates higher, than originally "estimated." Unnotarized, but signed and dated.

If 1003 (federal documents) appplications aren't signed at the time of application, how much sense does it make to date them at closing? BOs often remark at the inaccuracies on the 1003s.

Is it me, or are the powers that be skirting the intent of the RESPA protections for consumers?

Reply by PAW on 12/4/06 7:27am
Msg #163710

Re: Uh oh, according to this, I may have erred in *complying

All too often, the application is not completed on paper, but over the phone, email, etc. The LO/broker is obligated to provide the disclosures to the borrower(s) for signature but a lot of times the borrowers do not return them. (And there are times when the LO/broker doesn't even send them. But that's a different thread.) The LO/broker then requests that the original disclosures be signed at the table with the original dates. Since these docs are not notarized there is not a "backdate" issue for the signing agent. It is up to the borrowers whether or not they wish to comply with the request to date the disclosures with the original date. More often than not, most borrowers will comply with the request.

I run into this every month, especially on purchase closings with new construction. The builder and lender are in such a rush to get things done, there just isn't time to send the original disclosures to the buyer/borrower in time to have them signed and returned prior to closing.

Reply by Susan Fischer on 12/4/06 11:32am
Msg #163741

Thank you, PAW. BTW, I know it is not a notarial issue,

rather a general compliance issue with the lender. If the borrowers aren't given the opportunity to see the numbers and the terms, where is the protection? Many times I hear that ..."these are the *first* papers I've seen," as borrowers busily compare their hand-written notes with the docs in front of them.

Reply by Poppy on 12/4/06 12:53pm
Msg #163758

Re: Thank you, PAW. BTW, I know it is not a notarial issue,

Susan,
Not to answer for PAW but if a consumer has an issue or concern about a RESPA violation they can contact HUD.
www.hud.gov
Info on RESPA www.hud.gov/fha/res/respa_hm.html

Reply by Poppy on 12/4/06 12:58pm
Msg #163759

Opps, sorry about the bad link.. Guess I need to update

things... Try this for RESPA info...(not the link I had but it will get you started)
http://www.hud.gov/offices/hsg/sfh/res/resconsu.cfm

Reply by sue_pa on 12/4/06 1:11pm
Msg #163768

Re: Thank you, PAW. BTW, I know it is not a notarial issue,

I don't feel sorry for any of these people. I guarantee if they would not agree to schedule an appointment until they see final figures they would have them. I received an order Thursday to schedule an appointment for Thursday. Lady refused to talk to me and stated LO wasn't returning her calls and no appointment would be scheduled until she knew her final figures. She closed Saturday and LO missed his month end bonus.

Also, again I don't feel sorry for them if they aren't aware they should be getting initial disclosures - if they'd do their homework they'd know that and demand it - would I know about that if this weren't my job? probably not but it would be my own fault - I'm guessing most loans that are direct from the lender don't have this problem - the ones I see like this are brokered loans (the majority of my work)

Reply by NYCcloser on 12/3/06 10:58pm
Msg #163691

I KNOW WHAT U MEAN i HAD A CLOSING THE OTHER DAY i WAS GOING OVER THE DOCS WITH THE BORROWERS AND AT ONE POINT SHE HAD TO CALL THE LO TO ANSWER QUESTIONS. I TOLD HER WHAT HER INTEREST WAS IT WAS ADJUSTABLE. THE LO CALLED AND ASKED FOR MY NAME AND ASKED WHY I WAS TELLING TH BORROWER ALL THAT AND THEN CALLED MY TITLE COMPANY AT WHICH POINT THEY CALLED ME IN THE MIDDLE OF THE CLOSING TO ASK MW WHAT WAS GOING ON. I TOLD THEM FLAT OUT "I HAVE BEEN IN THIS BUSINESS FOR 10 PLUS YEARS AND I REFUSE TO LIE TO A BORROWER ABOUT ANYTHING SPECIALLY WHEN THEIR LO DID NOT DISCLOSED ANY INFO TO HER NOR SENT HER PAPER WORK. I SAY IT AS I SEE IT ON PAPER" " IM NOT LOOKING TO BE SUED FOR SOMEONE ELSE'S FAILURE TO DISCLOSE. IF YOU ARE WILLING TO TAKE THE CHANCE LET ME KNOW NOW SO I ACN WALK OUT CAUSE I WILL NOT BE PARTY TO THIS" THE GUY AT THE TITLE COMPANY WAS SHOCKED AT MY WORDS, HE KNEW MY WORK AND I HAVE WORKED IN THEIR OFFICE AS THEIR EMPLOYEE BEFORE. I GOT NO COMPLAINTS AFTER THE CLOSING TOOK PLACE AND MY BO WAS HAPPY. I SAVED THE FOOLS LOAN AND HE WAS TRYING TO SCREW ME WITH MY TITLE COMPANY.

Reply by Susan Fischer on 12/3/06 11:08pm
Msg #163694

(Please turnoff your CAPS, they hurt the reader's eyes) n/m