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Getting Your Home

from this couple’s parents. The lender promised to cut his origination fee in half because of the relationship. Usually, a lender charges a 1.0% loan origination fee. That fee is generally split between the loan officer and the mortgage company he works for. In this case, the lender either gave up his portion of that fee, or he worked it out with his boss for the company to discount the deal. At any rate, when Ken compared his good faith estimate with other lenders, the reduced fee made the difference. Their loan was going to be about $140,000, so a 1.0% fee would have been $1,400. They saved $700 by going with this lender, all other things being equal. Ken met with the lender and told him if he really took care of the clients, he would get other referrals from him. The lender was just getting established in the area, and he was eager for the new business. However, it took him longer to process the loan than he thought, and Ken did not have a settlement statement until the actual day of closing. Ken called him and the title company to bring something to their attention—the fact that there was a 1.0% loan origination fee on the statement rather than .5%—and asked for a correction. But this loan officer insisted he had met with the clients, and because they had not locked in their rates, and rates had gone up somewhat, he took a full origination fee rather than increase the rate. Ken asked to see the new good faith estimate that he should have provided if this were true. He said he did not provide one, but the clients understood the new loan terms. The clients insisted there was no such agreement, and at the closing table they were faced with a dilemma. They had to close with the charges as they appeared, or get the lender to write them a check back for the .5% difference or walk away and refuse to close on the home. They closed, and did not get a refund from the lender. They were angry with him but happy to be in their new home. That lender has never received a referral from Ken, 87

Profile for Linda DeVlieg Real Estate

How to Make Your REALTOR Get You the Best Deal - Albuquerque, New Mexico edition  

A guide through the real estate purchasing process - co-authored by Linda DeVlieg and Ken Deshaies

How to Make Your REALTOR Get You the Best Deal - Albuquerque, New Mexico edition  

A guide through the real estate purchasing process - co-authored by Linda DeVlieg and Ken Deshaies

Profile for lindadev