CAn a lender add to the GFE before the HUD-1?

Guest

My lender says that he "made a Mistake" and forgot to put the origination fee on our GFE and now wants the 1% for the loan. I know that origination fee's are common practice and 1% is the status quo. I am also aware that they are not required. Our lender is now trying to hand my wife and I an new GFE to include this cost. I want to verify before I go tell him to shove it that you cant do this. I do alot of research before I get angry. (I'm a Contracting Officer for the Federal Government) so, according to 24CFR 3700.5 the GFE has to be given within 3 days of the Application to include all reasonable costs the buyer should expect at closing. Therefore since it is now past this window we should not have to pay this fee. I understand that this is the majority of the lender's comission on this loan but his error is not my concern and this is a business contract not friends making a loan

Please verify that I am correct, if no one can than I am going to assume my research is valid and I am going to proceed. I hope this never happens to anyone else as you draw down to closing your lender says "Oh by the way your going to have to pay an additional 2k+ upfront". And its now too close to closing for you to shop around for another lender.

I would like to add for refenence that my wife and I are 800+ credit score buyers using a VA because we can with 5.125 30yr lock. I wont get into the BS I had to go through with the rate in its self. But sufice it to say they wanted to tell me we didnt lock after I requested my lock at 5.125 after rates went up they tried to have us sign a floating rate form.

Please let me know if my lender can do this in regards to the GFE issue above.

Thank you all in advance for any response

gmakerley · Posted: Mon Jul 27, 2009 8:59 am Post subject:

well, a good faith estimate is, after all, an estimate. that being said, there's no excuse for having had a memory lapse and not including an origination fee. by all means, stick to your guns and insist that the lender eat the fee. your loan officer made a major mistake and will suffer financially, but he might be able to eat less than a whole point depending on his company's rules.

gmakerley · Posted: Mon Jul 27, 2009 8:59 am Post subject:

but his paycheck, frankly, is not your worry. he'll likely make it up with the next guy.

Guest

I appreciate you quick response. I tend to know what Im talking about before I get involved in something. I am also going to "discuss" with my lender about why the property taxes are being estimated at 6K when last years assesment was less the 4. I know that that is something that is a pure estimate but he has the records we provided him showing last years rate. We are buying the house at 15.5K less that the county has it assessed for so why would it go up by 2K. Im am very quickly getting fed up with this lender but unfortunately they offer the best VA rate I could find so I guess I just fight for my deal.

Thank you again for your timely response.

Dave.

gmakerley · Posted: Mon Jul 27, 2009 9:27 am Post subject:

the tax numbers could merely be someone trying to be very conservative and give you a worst case scenario. keep in mind that as you get to the closing table, those numbers would be adjusted appropriately to reflect the real numbers. the lender cannot influence the tax rates, so whatever is true will be reflected ultimately. i feel your pain, though.

livinginnky · Posted: Mon Jul 27, 2009 11:39 am Post subject:

Not wanting to stir the pot, but I am going to anyway.

If he/she forgot the origination fee... what if they forgot to lock the rate or worse can't get you 5.125... it is also not unusual for shady lenders to have a different rate on the day of closing than the one that was quoted to you.

It is never to late to get a second opinion and VA rates should be comparable no matter who you are talking to.

Guest

I went to the bank yesterday after I got off of work and had a "nice" closed door chat with our broker. After some pandering on his part to his error we came to the understanding that we were not going to pay the fee and that we were locked at the 5.125 as agreed.

I wasnt a jerk I was just right and I have a Federal legal team on my side so it went quick and smooth. I know were getting a great deal with no origination fee so it all works for me. Let him make it up on the next applicant

Thank you all for your help.

Dave

gmakerley · Posted: Tue Jul 28, 2009 7:22 am Post subject:

not sure why you had to tell us you're not a jerk, dave; that was apparent from the calm you showed in describing the situation to begin with. it's gratifying to know that you were able to work out the issues to your satisfaction.

Guest

It didnt want to seems like an A#$%ole by telling my broker to do the right thing. I almost never lose my cool in my job I cant afford to. I am happy now that we locked when we did as the prime VA is now 5.375 in our area and just the spread on these rates would be thousands in the life of the loan.

Again thank you gmakerley for you patient assistance in this matter.

I look forward to providing my knowledge to others as I browse this forum.

livinginnky · Posted: Mon Aug 10, 2009 12:24 pm Post subject:

Dave,

Did you see the rate lock?

I sure hope everything works out for you.

eric1 · Posted: Mon Aug 10, 2009 4:39 pm Post subject:

It sounds like it worked out.

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