Adventures in the Good Faith Estimate and Refinancing: Part 2

In my last post, I began to tell you a little about my adventure with the "Good Faith Estimate" or GFE for my home loan.  Here, as they say, is the rest of the story:

So I called my friendly Chase consultant AxA.  Knowing that this was not the final GFE, I also knew that it could still be changed and we were not locked in to these fees.  I left a message and sent an email.  Shockingly, I got no response.

Here is where it gets interesting.  Life happens to us all, and time passed with me assuming that it would be taken care of.  After all, I DID send an email.  

The "final" GFE arrived in the mail.  I opened it with curiosity, fully assuming that everything would be correct.  

Bottom line?  "Total Estimated Settlement Charges:  $4,015.47.

What. In. The. FLYING HELL?

(Actually, at this point I might have used stronger language, but this is a family show.)

When I called my good friend AxA, he said "Oh.  Yeah.  That's wrong, but it's no big deal.  It'll be correct at closing.  Just sign the paperwork you get and we'll schedule it."  

No, I said, Nothing will be signed until we have corrected paperwork.  Re-do this and send out a correct GFE and we will review it and schedule closing when it is correct.

Here's where he challenged me. First, a BIG, annoyed sigh.  Then: "What's not correct?"  Was this arrogance?  Ignorance?  I suspect a combination of both.  So, I went-line by line- down the page to tell him what was not kosher.

1.  In our initial phone conversation, he said there would be no points.  Lo and behold- there's an 1/8 of a point charge.

2. In our initial conversation he had claimed no origination fee.  Guess what?

3. Hazard insurance:  $1400.  First of all, we already spoke of this and he knew that insurance was not escrowed on our loan.  Secondly, $1400??!!!  Even if we didn't already have (less expensive) insurance, I might want to shop around for a better rate.

4. Title Insurance: $894.95.  Not!   This is a reissue of title insurance, first of all, so the rate should be greatly discounted.  Secondly, you can check rate cards that are publicly available from any title insurance company, and for the amount of our loan, the highest rate I found was about $500.

He challenged me as much as he could until I said: "Listen.  I happen to be a Realtor, so I know how to read a GFE, and this one is WRONG.  This is not acceptable."

THEN- and this might be my favorite quote- he told me: "Don't worry about it.  You won't have to bring this to closing, it'll just get rolled into the loan."

This got me thinking.  Not too many people are aware that they have options when it comes to these things.  This is part of the reason that the mortgage industry is such a mess.  Many people would be so relieved to get out of their ARM and into a fixed rate that they might just accept what he said as the way things are.

But, think about this:  if I didn't question him, we would be paying interest over 30 years on over $2000  worth of charges that shouldn't even be there.  

You do not have to be "in the business" to shop your rates for title insurance.  But how many people know this?  And title insurance is just one example of the services that the consumer may choose.  Interestingly, after this conversation, my husband got a call to schedule our closing time.  "We're all set to close!" said the chipper voice from the title company.  

Well, believe it or not, my husband and I communicate regularly (!).  AxA was planning on just going around me to close out our file rather than do his job and fix the problem.

A few tips if you are going to Refinance or shop for a new loan: 

• Take copious notes.  Write down names, dates, time called, details discussed.  Do not be afraid to ask the person who answers the phone to spell their name for you or to repeat what was said so that you can write it down.  This was good info for me to have when I spoke with AxA.  When I told him I took notes, he backed down and took off the points charged.
• Follow up with email.  Better still, if you can follow up phone conversations with email, then do it.  Just a simple "Per our conversation today at 2pm..." and then what you have in your notes.  It's also a good idea to set your email to have a "return receipt" so that you know it was received and opened.  KEEP all emails that go back and forth.
• Don't be afraid to ask questions and challenge the answers!  So many of us are reluctant to question the bank because we assume they know what they are talking about and are telling us the truth.  But, as in my situation, paying for a couple thousand dollars over 30 years (plus interest) that should not even be charged is ridiculous.  Suggesting "rolling it into the loan" is just stupid when it doesn't even belong there in the first place.
• Do NOT sign anything until you are satisfied that your loan paperwork is correct.  If I had just waffled and signed the loan docs stamped "sign and return", then we would have been locked into all of those erroneous charges.  

Bottom line:  my friends, if you need assistance understanding your GFE, Call me!  Or call any licensed realtor to help you understand what you are reading.  You have the right to know what you are signing and agreeing to, and what charges you do and do not have to pay!

Adventures in the Good Faith Estimate and Refinancing

A “Simplified” GFE?

Making the Good Faith Estimate More Transparent May Make it More Difficult to Close

I have been living in the same home for almost 8 years now.  It is cozy and has enough room for my family.  We have designed it to suit our needs and updated or upgraded paint, bathrooms, basement.  

When we bought our home, we got a great deal on it (for the time!), and we were able to put down a pretty decent downpayment after selling our previous property.

So, our loan isn’t big.  It was originally with ABN-Amro and along the line it was purchased by WaMu.  We had no problems with that, and in fact, when  we were sent a mailer about doing a re-fi several years ago for a flat fee of $495, we decided to go for it.  We were smart- we got an adjustable rate (not the smart part...) mortgage, took a little cash out, and went on with our happy lives.  

We are thankfully nowhere near being upside down on the house (that’s the smart part), but one of these days it IS going to adjust.  Mind you, this won’t happen for at least another year.  With interest rates being low, we decided now would be a good time to lock in our rate.  If we could do that now, we would drop the interest rate down over a point, without changing our payment.  Score!

Enter Chase Bank

In the meantime, Chase acquired WaMu.  (Cue the music: Duh-duh-DUHHHNNNN!)  People have many different stories to tell about their experience with Chase Home Loans.  This is mine:

It started with a call to the 800 number on my loan statement to try and get the right department.  This was an adventure in its own right and might even be worth another blog.

Once I got through to the correct department, I spoke with a very nice man whom I’ll call AxA.  AxA was very informative.  Per the notes I took during this first call, he told me that it would be no problem, we might even be able to lock in a rate without an appraisal!  Because we are already Chase customers, there is no origination fee!  There won’t be any points!  We have great credit!  He! was! very! Enthusiastic!!!  In double time, with me furiously taking notes, he said that there would be a processing fee of $750, but we would get some of this back at closing.  It turns out that we would need a full appraisal, but that was to be expected in this market.

The Good Faith Estimate Arrives

Per the new regulations and Truth in Lending, a Good Faith Estimate is sent when you originate a home loan, and then a final one is sent just before closing.  There are certain fees that a consumer is able to “shop”- among them title insurance, home inspection and a couple of others.  Because we are not purchasing a different home, inspection is not necessary.

I tore into the paperwork to see what lay inside.  This document is dated January 15- the new Truth in Lending went into effect January 1, so this would be my first glimpse.

I glanced down the page.  At the bottom, “Summary of Charges:  $2560.47”

What.  The.  Hell?

Origination charges 1510.59.  “All other Settlement Services” 1049.88.  I don’t think so.  

Next:  RealtorJenn gets to the bottom of it...

Belle Creek Family Center: Upcoming Events

Don't miss the Easter Egg Hunt and Breakfast!
Come join us March 27 at 9am at the Belle Creek Family Center.  Grab your Easter basket- the Easter Bunny is expected to hide lots of treats and fun things to find!  The hunt is on rain or shine- or snow.  See you there!

Real Estate Buzz: Activity for February 2010

The action in Belle Creek is really picking up!  Thankfully, many of the "For Sale" homes in our neighborhood are being sold.  This is great news whether you are thinking of selling or not.  When existing inventory clears our, it means less vacancy, and eventually, higher home values for the Belle Creek Real Estate Market.
Here is a snapshot of what we saw in February:
3 houses went under contract in Belle Creek in February.  This means that there is a signed agreement between the buyers and sellers to purchase the home within a given period of time (anywhere from 30-60 days, usually).  During this time, the buyers will secure financing and inspect the property and the sellers agree to take it off the active market.  Earnest money has been given to the home sellers by the home buyers as a show of good faith and their intent to see the contract through.
The properties under contract are:

• 9645 East 105th Avenue
• 9443 East 106th Drive
• 10933 Belle Creek Boulevard

These are what are known as pending sales.  Pending sales are a leading indicator- they show us what is likely to happen over the coming months.  The downside to pending or under contract sales is that we do not know what the offer price is or what the actual sales price will be until the sales close.

That said, there were 2 closed sales in Belle Creek this February!  They were:

• 10967 Beeler Street.  Listed at $210,000, sold for $212,500
• 10745 Boston Street.  Listed at $225,000, sold for $220,000

Belle Creek Family Center: Upcoming Events

Community Garden

Only 15 garden plots remaining!  Starting March 1^st, garden plots will be available to non-Belle Creek Residents.  Go to www.bellecreek.org to get the complete garden form.  Sign up at the Family Center.  

Mark your calendars…

Business to Neighbors

When…March 17^th @ 6 p.m.

Where…Belle Creek Family Center
What…network with other Belle Creek business owners.

RSVP to Melissa at melissa@themixxconsulting.com.
Or check out their website to find a specific kind of contractor @ www.b2nnetwork.com.

Belle Creek Easter Egg Hunt and Pancake BreakfastWhen…March 27^th @ 9 a.m.

Where…Belle Creek Family Center

Look for more information to come!

Don’t forget to visit www.bellecreek.org for all the current community information.

What You Don't Know Can Haunt You: Shovel Your Walks, Please!

Section 19-1 of the Commerce City Municipal Code is a ZERO Tolerance Ordinance

Exhausted, we pulled up to the front of our home on January 2, after an 18 hour cross country drive.  We had not stopped to rest overnight, preferring to get across Iowa and Nebraska in the frigid temps as quickly as possible.  Plus, at one point over the Winter Holidays, I80 had been shut down due to snow and ice, and we did not want to risk spending several days on a hotel lobby floor or in a truck stop with a young child and a dog.

But, we came home to plenty of snow.  We had been gone for over a week and had no idea when the snow came, or how many times it had snowed, but a makeshift path had developed on the sidewalk beside our house where people had gone on their daily sojourns.  I removed the "warning" slip from the city and the next day diligently shoveled our sidewalk.

Too little, too late.

About a month later came the court summons.  This was no joke, no minor oversight.  My husband and I spent about 3 hours in court on Thursday morning finding this out.  Before we went before the judge, the City Attorney called us into his office to talk about our plea.  He was very serious about the matter.  this is a ZERO tolerance issue.  It does not matter that we were out of state.  It does not matter that that was the side of our house and our neighbor had kindly taken care of the front walk, so half of it was done.  Here is what the  Commerce City Ordinance reads:

Sec. 19-1. - Duty of owner, occupant, etc., as to maintenance of sidewalks.

The owner, occupant or agent of the owner of any building, property or lot in the city shall maintain the sidewalks for the property including those on public rights-of-way in a clean condition and remove snow and ice from the sidewalks within twenty-four (24) hours after each snowfall.

I had never even heard of this ordinance, but I know it now.

We were lucky though.  The judge gave us the minimum fine of $25 because it was our first offense, and after court costs it came to about $60.  And I can guarantee that there will be no further offenses of that sort.  So shovel your walks, neighbors.  Then go out and play!

Belle Creek: a Community with Open Hearts and Open Arms

The goal wasn't lofty.  It wasn't insurmountable.  But to a young man undergoing intensive chemotherapy and trying to support a young family, $2500 is a lot of money to pay out of pocket for his deductible.
Enter Belle Creek residents and friends.  When Jamie Latham Shaw put together the spaghetti dinner fundraiser to help our her friend, she was hoping for about 250 people at $10 a plate.
"I figured that was a reasonable goal." says Jamie.  "Between the neighbors and Levi's church, we could likely get that many here."
And how.
As the sun was setting on that February evening, people began to pour into the Belle Creek Family Center to show their support.  Donations of food poured in in the weeks leading up to the event from community members and restaurants alike, including food from Olive Garden.
A silent auction was arranged, with everything from babysitting services to Arbonne gift baskets to gym memberships.
"It looked almost like a flea market in here," commented Jamie afterword.  "People were amazing.  Every last item was bid on.  The people in this neighborhood are awesome!"
She went on to say that most people who won their auction items wrote checks to support Levi for more than their winning amounts.
The look on Levi's face was priceless.  If you have ever met Levi, you have seen his infectious grin.  It was like a beacon of warmth and light that night.  "People were incredible," he said. "I met people from the neighborhood that I never even knew.  They made a point of coming up to introduce themselves and say they just wanted to help out.  I feel so incredibly blessed."
At last count, Levi thinks there were about 500 people here, not counting kids.  "But I still haven't gone through all the pictures," he says with another one of his smiles.
And that goal of $2500?  "Well, let's just say that we went well beyond that," Jamie says with a laugh.  "Levi won't have to worry about his deductible, and he can concentrate his energy on getting better."
This is why Belle Creek residents love it here.  Levi was just beside himself at the turnout.   But Jamie put it best when she said, "people just want to give.  When so many people out there are trying to make ends meet, people want to be a part of something larger than themselves and give whatever they can.  Every little bit makes a difference."

Want to help out?  Chick Fil A, one of the generous donators at Levi's dinner, has taken it upon itself to host another fundraiser, February 20 at 5pm.