Posted by Richard Ingram on 2/18/12 8:02am
Msg #412161

Is FHA Insurance similar to PMI?

Long read! Received a call for refi but no confirmation. Docs show up in my email and call title who has has David at Forseti Real Estate Services send confirmation less than 2 hours prior to signing time. Call borrower who wants to move time back 30 minutes with 3 more signings, all after 4:30PM.
Borrowers wife did all of up front application work and both look over HUD and sign until we get to note. Note says payment $1,160, HUD says $1, 374. Can't reach loan officer as voice mail is full. I call title and husband talks to lawyer and says that FHA Insurance is not PMI and they have RTC.
Both agree to go on with signing but wife gets her calculator and starts crunching numbers. They look at FHA/VA Addendum to Uniform Residential Loan Application and question $2,300+ up front and $212+ monthy premium for 6o months. I can see both getting more upset by the minute.
They had avoided PMI purposely in existing finance and were told none would be charged in refi by loan officer and lawyer at title earlier on phone. Also, HUD has them getting$18,300+ back they did not want. Wife says loan officer called this afternoon to say they were getting $5,000+ more than expected because appraisal was higher. Don't want money back, just lower rate from 5.25 to 4.25. LTV is 88.8929%.
Wife keeps crunching numbers but keeps signing and getting more upset by the minute. I tell them RTC will protect them but they look over it carefully and RTC says they have to mail or cancel by telegram by midnight 2/22/2012. No provision to cancel by fax. I give them the title attorney's fax, voice number and address.
Husband is really upset and now wanting to cancel but wife is really concerned about losing $400.00 on appraisal. She wants to talk to loan officer and feels she was not truthfully informed. I tell them this is weekend and Monday is a Holiday. I can hold finished signing package until Monday so they can talk to loan officer. I fully expect to hear from them telling me not to return the loan package and have advised the signing company of this situation.
Is FHA Insurance PMI? Thanks for any input.

Reply by Richard Ingram on 2/18/12 8:15am
Msg #412163

Follow up on topic Is FHA Insurance similar to PMI? Wife is now very upset as loan officer told her not to make Feb. payment which is delinquent as of the 15th on current mortgage. Both are upset and feel they were misled by loan officer as to the costs and FHA Insurance. Wife is really upset about losing $400.00 cost of appraisal.

Reply by Blueink_TN on 2/18/12 8:36am
Msg #412164

FHA/PMI/MI All the same thing. As a signing agent, you are not to discuss the terms with the borrower, your role is to notarize the signatures and return the package. You mentioned the wife had spoke with the LO before you arrived, this is when she should have made sure she was getting the loan she requested. As for the appraisal, she didn't lose anything, she got the appraisal, right?

Reply by HisHughness on 2/18/12 8:51am
Msg #412165

Say what?

***As a signing agent, you are not to discuss the terms with the borrower, your role is to notarize the signatures and return the package.***

This is the kind of blanket statement that curdles the milk in my cornflakes.

Of course we discuss the terms with the borrower. We go over the note, we go over the HUD, we go over the TIL. If the borrower has reservations, and those reservations can be resolved by a reference to the documents, we point that out to them. Those are the things signing agents do.

What we don't do is try to tell the borrower why a particular decision about a loan was made during the development process. That's what loan officers, bless their pea-pickin', commission-grasping, facts-shading, loan-hustling, pina-colada-sipping hearts are supposed to do.

Reply by Richard Ingram on 2/18/12 8:52am
Msg #412166

Re: Say what?

Hugh,
You hit the nail on the head. Thanks!

Reply by Blueink_TN on 2/18/12 9:08am
Msg #412172

Re: Say what?

Maybe you just need some fresh milk. Any discussion of the loan that a signing agent cannot merely point reference to where on the documents they might find their answer, is off-limits. A well-meaning overzealous signing agent can in thirty minutes destroy weeks of work by that pea-pickin', commission-grasping, facts-shading, loan-hustling, pina-colada-sipping Loan Officer.

Reply by Porada/MA on 2/18/12 9:23am
Msg #412176

Re: Say what?

I suspect that the real answer here may be state dependent.

In MA, any discussion of the content of the documents may be regarded as the practice of law. I specifically tell the customer/client upon beginning my work that I cannot discuss any content of the documents other then to tell them where to sign/initial and do notarial work for either a jurat or an acknowledgement. I specifically tell them to call their contact (if I don't have one to offer) if they have any content questions.

Reply by Linda_H/FL on 2/18/12 9:45am
Msg #412180

Re: Say what?

First of all, reviewing information laid out in front of you in black and white on the printed docs, avoiding giving any advice interpretations, why's or opinions, is not UPL. If you think, for example, that reading the interest rate section of a note is UPL, then something's just not right....

Second...MA is an attorney-only state - if an attorney can't discuss the docs then there's even MORE not right there.

Reply by Richard Ingram on 2/18/12 10:21am
Msg #412192

The big problem I have been experiencing is that the loan officer is not going over the HUD with borrower in sufficient manner for the borrower not to have tons of questions for the signing agent. When the borrower specifically questions something I ask them to read the document and call their loan officer with questions. When they can't reach their loan officer, (which is most of the time)they have questions that I tell them I can't discuss with them and specifically what my limited role is. Of course, this does not keep them from asking more pointed questions at which time I point out the RTC or tell them we can stop if that is their desire. Most are so frustrated with the long process and fearing the loss of the loan they either sign, knowing they can follow up with the RTC, or stop signing.
In this instant, after talking to the attorney, they agreed to continue with the signing but became more upset with the loan terms, their signing agent, and the fact the RTC had to be mailed or telegraphed. It being the weekend and a Monday holiday borrower wanted to talk to the loan officer as they felt misled. The results is I spend 11/2 hours while the borrower looks over the docs, tries to reach the loan officer, and discusses the loan with each other. This could be avoided with proper disclosure and discussion of the final HUD with the loan officer and borrower.

Reply by Blueink_TN on 2/18/12 10:28am
Msg #412194

Richard

I agree, the loan officer should have discussed the HUD with the borrowers well before you got there AND should have made him/herself available during the signing. I feel for your nightmare at the table, I know you were just trying to do your job. If the loan doesn't close, it's nobody's fault except the LO. Shame on him/her.

Reply by ReneeK_MI on 2/18/12 9:05am
Msg #412169

"PMI" = Private Mtg Insurance
"MIP" = Mtg Insurance Premium

The FHA doesn't charge "PMI" technically, because they're not a private company. The FHA charges both an upfront MIP, and an annual MIP - the annual premium is collected by the lender in monthly increments, within the total of the mtg payment.

This will NEVER be shown on the Note's disclosure of the P&I payment - just as any other additions (escrows) are not shown there.

The FHA will place MIP in various ways, depending upon the loan product (15 yr or 30 yr are different, for example), and I believe the LTV to exempt MIP is now 78%. I did just check about a week ago, but I always have to discount my memory! It's all there for the hunting on the FHA's website.

The $400 a loan applicant pays is an application fee. It is USED to pay the appraiser and credit bureau, but it is STILL an "application" fee. This is because up to 40% of loans applied for are denied - the lender isn't going to foot all that. Since you can't fully apply for a loan w/out an appraisal and a credit report ... you pay an application fee.

Last comment - I would NEVER, ever ever hold a package. Ever. Those documents belong to the Lender, not to you and not to the borrower. This is why the FDIC specifies that the RTC is NOT to be used to induce someone to 'sign first, worry later'.

Reply by Linda_H/FL on 2/18/12 9:51am
Msg #412182

Here's trouble...Renee...I'm going to disagree with you



One part of your post..."The $400 a loan applicant pays is an application fee. It is USED to pay the appraiser and credit bureau, but it is STILL an "application" fee"

The application fee is the fee for beginning processing the loan app - IME it is not used to pay the appraiser - the appraiser's fee is an entirely separate fee, many times POC by borrowers at the door directly to the appraiser. Credit report is also a separate fee.

Reply by HisHughness on 2/18/12 10:04am
Msg #412185

Re: Here's trouble...Renee...I'm going to disagree with you

Cat fight! Cat fight!

Will there be hair pulling? Blouse ripping? Biting? Nail scratching?

I do love these Saturday mornings.

Reply by ReneeK_MI on 2/18/12 11:34am
Msg #412208

Ok, Linda ... let's step outside!

I'll cut to the aftermath - Linda won, and I broke a nail. LOL

I now see that times have changed ... and from what I've read since you poked me in the ribs is that some lenders are charging both, the appraisal (upfront or paid direct), AND an app fee. Sheesh. Neither are refundable.

Mostly I do see the app fee credited back - when the loan is consummated, which is awful nice of them.

So, some of these lenders are charging $400 app fee, AND the appraisal - boy, you'd better really be sure you want a loan before applying! Used to be that appraisals were not transferable to another lender, w/out paying a fee for that 'service', is that still the case?

Reply by Linda_H/FL on 2/18/12 11:44am
Msg #412212

My hair's a WRECK - hope you're happy!...:) n/m

Reply by ReneeK_MI on 2/18/12 11:45am
Msg #412213

always game for a cheap thrill =) n/m

Reply by Linda_H/FL on 2/18/12 11:50am
Msg #412214

LOL!! n/m

Reply by Raimond on 2/18/12 9:16am
Msg #412173

That is why I cover the note when I call to confirm the appointment..
Holding the docs until they decide? Really? You were hired to get them signed and you did. The BO's had a choice to sign or not sign and they made their choice. What would you tell who hired you when questioned why you did not return the completed package?

Reply by MW/VA on 2/18/12 9:19am
Msg #412174

I'm guessing that the LO was trying to put them in an FHA

loan & their loan wasn't currently FHA. The only loans I've seen come down the pike are either FHA or VA, which are goverment insured.
I also had a situation where a couple was consolidating some other debt into their mortgage. They also had a low enough LTV with the existing mtg. not to have the FHA premium. With the new loan it took them to a higher LTV & required the FHA risk premium. The MIP (as I always refer to it) was over $200 a month. They were shocked about that extra charge. When I left the signing it sounded like they were going to cancel, but I never heard one way or the other.

Reply by desktopfull on 2/19/12 11:40pm
Msg #412359

IMHO, you've made 2 huge mistakes. First, you stated "...I tell them RTC will protect them...," the RTC isn't to be used to convince borrower's to sign their loan docs. By making that comment you've put yourself in the middle and if they cancel they have to start their loan process completely over, there's no negotiating on the loan once the RTC is signed. Second, once the docs are signed you aren't permitted to withhold the docs from the lender or TC. Did you not contact the hiring entity after the closing as to whether the closing was completed or not? If you did, how do you explain to the hiring entity that you aren't returning the signed docs and that you gave them back to the borrower? Sounds like you've dug yourself into a hole, good luck on getting out of it and avoiding some serious repercussions.