Posted by Alice/MD on 4/2/09 10:56am
Msg #283138

Where do we report something illegal

I know it is none of our business what is on the HUD as long as the borrower agrees, and they are both over 75 years old.

What if you see a loan origination fee $12,000 and broker's fee $13,000 on the HUD and total closing cost is over $40,000. Is this legal ? If something smells and we are not to give advice to borrower; what do we do?

Reply by ME/NJ on 4/2/09 11:01am
Msg #283139

Who said the prices are illegal? can you provide a copy of the state or federal law that says so? What was the percentage of the LO fee? what was the loan amount? Was this FHA? Was this a broker loan?

Many facts left out.

Reply by ME/NJ on 4/2/09 11:03am
Msg #283141

Maybe this was the 75 year olds only way out of his or her situation? was it smart to sign the paper work? with all the facts yu can't judge.

Reply by CaliNotary on 4/2/09 12:42pm
Msg #283164

All the facts we need are right there

They're senior citizens and they're being charged loan fees WAY WAY WAY WAY WAY over what is normal for a refi. That screams elder abuse to me, and it's our responsibility as decent human beings to report it to the correct authorities for further investigation.

Reply by Lee/AR on 4/2/09 11:03am
Msg #283140

Not enough info--(nor should there be more)--just enough to make it look really bad. Is there a Sr. Citizen Omsbudsman office/dept. in your town? Think I'd start there.

Reply by Alice/MD on 4/2/09 11:22am
Msg #283148

Re: There is more to the story

The title company changed the TIL, APR rate that was signed on March 13th which was 5.6 and asked the borrower to sign a new TIL, APR at 6.6 on April 1st. This elderly couple believe the loan office can do no wrong.

Reply by Linda_H/FL on 4/2/09 11:15am
Msg #283144

2-3% is what I've seen for origination fees....$12K would be 3% of a $400K loan...is that possible in your situation, Alice? Sounds like a reverse mortgage, but if it's not a reverse, and it's a straight refi, then 2-3% origination fee is not unheard of...at least not IME. And the brokers' fee is, many times, an equal amount.

For brokers in our midst, if it's a reverse mortgage (which is what it sounds like) is the origination fee based on initial draw/loan amount or final anticipated principal? Just curious.

I do agree with you though, Alice - those fees are borderline obscene..MHO

Reply by PAW on 4/2/09 12:26pm
Msg #283161

FHA restricts the amount of the Loan Origination Fee on RMs, just like the Mortgage Insurance Premium, at 2% of the lesser of either the home value or the FHA county limit.

Broker's commission quite often range in the 6%-7% of the loan amount.

Reply by Les_CO on 4/2/09 11:21am
Msg #283147

I would guess it depends on where the lender/loan broker is located. MD has some pretty decent laws/guidelines on what insurance companies can charge (including Title Insurance). If the Title Company is in MD I’d check with Maryland Insurance Fraud Division 1-800-846-4069.
These things are really not your business…. Unless you think it’s illegal. When I see something like this I start my conversation with “Have you spoken with your Loan Officer today?” And let them ask me questions…that I answer honestly….with the caveat that I’m just a notary here to witness their signatures, and can’t give legal advice etc., etc.

Reply by Alice/MD on 4/2/09 11:28am
Msg #283150

This was a refi, 30 year fixed.

This information was shared with me by a fellow notary. I told her I would find what to do in case this happen to me.

Reply by CaliNotary on 4/2/09 12:39pm
Msg #283163

$40K in loan fees doesn't sound REMOTELY kosher to me. I think the most I've ever seen is in the $15K range. And that they're senior citizens just raises more red flags. If they were 40 years old I'd just say they were dumbasses for letting themselves get ripped off, but it's a whole other ballgame when it comes to seniors.

I think you should definitely call the local police department, tell them that you've encountered a potential case of predatory lending with a senior citizen as the victim, and ask who you should contact. They'll point you in the right direction, and it might be able to be done anonymously.

This is one of those cases where it's definitely better to err on the side of caution. If there's nothing wrong happening, that will make itself known soon enough. If there is something wrong happening, these seniors need your help.

Reply by Gary_CA on 4/2/09 5:46pm
Msg #283228

I know who I'd call...

Lin Tillem... a San Francisco area attorney who's on the biggest talk radio show around and is an Elder Law specialist. I'd ask him what can be done and who to call...I'd ask for a free 3 minute consultation.

Okay, that doesn't help you much... but it does.

There is an association of Elder Law specialists... find one in your area... I know they have a web directory, google "elder law lawyers".

Then call one and tell the receptionist "I know of a 70 year old couple who is being charged $30,000 extra in loan fees and I don't know who to call."

They'll have an answer.

Reply by NCLisa on 4/2/09 2:09pm
Msg #283183

The Banking Commission

I had a closing a couple weeks ago where the MB was ripping of the BO. He strung her out for 5 months, right before the ARM adjusted upwards, and then got the docs to her. She flipped out when I got there, her closings costs/broker fees were around $10,000 broker even added a $600 title abstracting fee. She called the banking commission immediately after I left, and I went back there the next week with loan docs with only about $1500 in fees. Turns out the MB had forged a pile of disclosures too.

Yes, the banking commission listens, and gets things done very quickly.