Posted by HisHughness on 6/27/11 2:55pm
Msg #387879

Would several of you please tell me -- verbatim --

how you describe the aggregate adjustment to borrowers?

On a continuing basis, that is the one thing that borrowers tend to dislike most about my presentations.

Well...that and the halitosis.

And the lewd remarks.

And the glassy eyes from the doobie.

And the gas.

Maybe the gas most of all, now that I think about it.

Thanks. Once I get the aggregate adjustment thing down, maybe we can work on the rest?

Reply by Linda_H/FL on 6/27/11 2:59pm
Msg #387880

This is the cost of your loan - it is certain itemized costs shown here (show them the itemization of amount financed) expressed in a percentage...in other words, these costs are XX% of your loan.

Reply by HisHughness on 6/27/11 3:02pm
Msg #387881

Ummm...maybe that's the problem. Your explanation doesn't comport with my understanding of what the AA is. I thought it was an adjustment to compensate for an excess in upfront costs.

Reply by Glenn Strickler on 6/27/11 3:17pm
Msg #387891

I basically mirror Linda-- I use the KISS method.

You have to keep it simple. (Pretend you are talking to me over in JP, Oops forget that!) If you get into too much detail, they the BO's eyes tend to gloss over or they are overwhelmed by the presentation. Some get downright ornery. So take the information you want to present, boil it down into the simplest, shortest presentation you can. Probably should not use any words longer than 7 letters.

Reply by Linda_H/FL on 6/27/11 3:18pm
Msg #387892

Thanks Glenn...just make sure you differentiate

the APR from the Aggregate Adjustment...

Reply by Glenn Strickler on 6/27/11 3:24pm
Msg #387895

Depends on what state we are in also, correct?

I too mis-read the post as I dropped down to the funny stuff.

Since California uses a Good Faith Estimate at closing, then it appears.

Basically when asked about that adjustment I have boiled it down to this

"This is the amount of money that is secured by the lender in an escrow account that is paid by the borrower at the closing of a loan. This money is a reserve for homeowners insurance and property taxes."

Reply by ReneeK_MI on 6/27/11 3:04pm
Msg #387883

At some point today, this is going to kick in for Linda =)

I'm giggling at the image of when it does!

The aggregate adjustment is the amount backed-out of the initial escrow set-up, because the lowest running balance of the escrow account for any given month can not exceed 2 times the monthly escrow payment, per gov't regulation. (It can be LESS, but can't be more.)

Reply by Linda_H/FL on 6/27/11 3:12pm
Msg #387889

Hush you..I can't believe I did that...:)

But, IMO Renee, your explanation to the borrowers goes a little farther than I feel we're authorized to go.

Reply by ReneeK_MI on 6/27/11 3:20pm
Msg #387893

I can't believe you did either!

Now, I'm gonna get sassy and disagree about it going too far. Not something I venture to explain unless asked, and not often asked ...but being conversational about generalized mortgage things isn't UPL. We non-lawyers do get to converse in or out of the mortgage context, we just can't practice law.

Reply by Linda_H/FL on 6/27/11 3:41pm
Msg #387900

Okay...:) n/m

Reply by JanetK_CA on 6/27/11 9:57pm
Msg #387972

Re: I can't believe you did either!

I agree, Renee. No interpretation or advice there - just the facts, ma'am. Nice summation, BTW!

Reply by Teresa/FL on 6/27/11 3:06pm
Msg #387884

If they ask about the aggregate adjustment this is what I say:

The lender takes the amounts for the estimated property tax bill and the estimated homeowner's insurance bill and calculates how much needs to be set aside each month for your escrow account. This is normally 1/12th of each annual bill. Federal law allows them to collect no more than a 2 month cushion in the account to cover any variances when the actual bills are submitted for payment from your escrow account. The aggregate adjustment is computed by some "special" computer program they use and is intended to make sure they do not collect either too much or too little when your escrow account is initially funded.

If they don't ask about it, I don't go into detail.

Reply by Linda_H/FL on 6/27/11 3:10pm
Msg #387888

Oh Hugh..I'm so sorry...I mis-read your post

I've never had one borrower ask about that adjustment.

Again, I'm so sorry.

Reply by SouthernOK on 6/27/11 5:53pm
Msg #387935

These aren't the droids you're looking for...will that work? n/m

Reply by NJDiva on 6/27/11 3:40pm
Msg #387899

LMAO...

Hugh, I think you've done lost your mind! Oh wait, I guess I'm the last to know? tee hee

Reply by HisHughness on 6/27/11 3:52pm
Msg #387901

Thanks, everybody

What I'm going to tell borrowers in the future is that the lender is prohibted from taking out, up front, more than a certain amount. When the final estimates are in, if it turns out the lender has set aside more in the escrow than federal regulations permit, the aggregate adjustment corrects the withholding to the correct amount.

That's what I got from the discussion. Is my explanation correct?

Would someone please slap Linda to make sure she's conscious?

Now what do I do about the gas?

Reply by Linda_H/FL on 6/27/11 4:00pm
Msg #387904

Re: Thanks, everybody...LOL

Sounds good to me Hugh - you can explain APR while you're at it too..

Reply by jnew on 6/27/11 6:15pm
Msg #387939

Re: Thanks, everybody

I think your final answer is correct. As for your personal deal, lay off the Mexican food and/or cigarettes. LOL

Reply by JanetK_CA on 6/27/11 10:11pm
Msg #387976

Re: Thanks, everybody

Hmmmm... Now maybe I'm getting confused - but is it correcting the withholding or the initial deposit into the escrow account? (Just for our own knowledge.) I'm in agreement with those who suggest that the less said the better. I have been asked about it once or twice (lots of engineering types around here) but like others, I just said that it's to adjust limits on how much goes into the account. Frankly, I think that the fact that it's a credit and not a charge helps a whole lot with the lack of follow-up questions!!

Reply by Art_PA on 6/27/11 3:57pm
Msg #387903

Why? They don't sign it, they don"t see it. My $.02 concerning forms and disclosures which do not get signed.

Reply by Linda_H/FL on 6/27/11 4:04pm
Msg #387906

Art, that Aggregate Adjustment is on the HUD... n/m

Reply by Art_PA on 6/28/11 2:29pm
Msg #388060

Re: Art, that Aggregate Adjustment is on the HUD...

Doing Chase loans & was thinking about their explanation form. I don't recall borrowers ever asking about this item; one may have but I don't remember. It is not my practice to go over the HUD line by line so I don't volunteer to address what is not asked.

Reply by ReneeK_MI on 6/27/11 4:11pm
Msg #387908

Cool - here's a spreadsheet to play with

It'll calculate the aggregate ...

http://www.bankerscompliance.com/compliance-resources/free-downloads.htm

Reply by ReneeK_MI on 6/27/11 4:13pm
Msg #387909

Intended just for the cheap thrill, nothing more! n/m

Reply by Linda_H/FL on 6/27/11 4:20pm
Msg #387913

Renee, if Aggregate Adjustment calculators give you a

cheap thrill, you need a new hobby or you need to get out more...

Reply by ReneeK_MI on 6/27/11 4:24pm
Msg #387916

No fake there!

I am currently 'getting out'.

Getting out of cooking dinner, feeding the dog, etc. I worked inside a title co today, and being in that environment saps the heck out of me!

Reply by HisHughness on 6/27/11 4:35pm
Msg #387919

Renee, I'm available

***Renee, if Aggregate Adjustment calculators give you a cheap thrill, you need a new hobby or you need to get out more...***

The ex-wives will all tell you I'm about as cheap as they come. At my advanced state of decreptitude, the thrill part may be a bit more difficult, but I can always set my teeth on the table and grin at you. Would that suffice?

Reply by ReneeK_MI on 6/27/11 4:36pm
Msg #387920

LOL - I already have one of those!

hence the spreadsheets???

Reply by Dorothy_MI on 6/27/11 6:44pm
Msg #387946

Re: Cool - here's a spreadsheet to play with

I try to keep it as simple as possible, therefore I do not point it out on the HUD. If they question it, I just say, the government only allows them to have a certain percentage in escrow. (So far, they've bought it each and every time). Usually I get an, Oh, OK. Actually, my TIL explanation is much the same. "It's the way the government makes them figure it". Of course, I always do the note first so if there is any question, I tell them their contract is for X.XX%. (Works at least 90% of the time) I like to KISS it if at all possible.

Reply by NJDiva on 6/27/11 4:16pm
Msg #387910

Am I incorrect by saying...

It's how they come about the number for your escrow account? lol

Reply by Marian_in_CA on 6/27/11 4:17pm
Msg #387911

I've never been directly asked about it... I usually make sure to point out the impound account estimate and explain the estimated ins and outs for the coming year. Interestingly, I've never actually been asked about the AA, though. I think most of them just lump it all together with the other fees and adjustments on the HUD and GFE.

Reply by ReneeK_MI on 6/27/11 4:21pm
Msg #387914

Line 1007 on the Hud - it's disclosed, IF there is one. n/m

Reply by Marian_in_CA on 6/27/11 4:34pm
Msg #387918

Re: Line 1007 on the Hud - it's disclosed, IF there is one.

Thanks... I meant, that from the borrower's perspective... after a while, all those fees just start fading in to one giant blur, and they only pay attention to the "big" ones, if they bother at all. I've found that spending a minute on the impound account details if most effective, because it's so well laid out. The majority seem to appreciate that. I started doing that when I noticed I would get questions about the impound account.... since I started that, no questions.

In my experience, most of them have already received a copy before I get there, so it's never an issue.

Reply by OR on 6/28/11 10:51am
Msg #388023

Hope this helps. If I your question is about the escrow account......
"Aggregate means to collect or gather into a mass or whole" .....

I tell them that the title company looked at how much they have been paying for their tax's and home owners insurance added a few dollars for a cousin. Then they divided the total by 12 months. That figure was added to their payment. That is the payment they will be paying each month. Then I say...We just need to look to make sure that they are paying the tax's and insurance on time. Now I have given the borrowers something to look for. Hope that helped