Tuesday, March 23, 2010

The New and Improved GFE?

A “Simplified” GFE?
Making the Good Faith Estimate More Transparent May Make it More Difficult to Close
pastedGraphic.pdfI 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!
pastedGraphic_1.pdfEnter 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.

pastedGraphic_2.pdfThe 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...

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