Written By: Tracey Rumsey, Staff Writer, MortgageCurrentcy.com & Loan Originator with SWBC Mortgage, Salt Lake City, UT.
If RESPA changes are the final blow - swaying you to consider a simpler career path, say neurosurgery or something, you are not alone.
I have to vent for a minute, because I know you are with me on this one. Let’s see….
A new borrower comes to you because his Realtor told him that you are a fabulous loan officer and he needs to get pre-approved and get a Good Faith Estimate.
You look the new borrower square in the eye and have to say, “Wonderful! But I can’t give you a Good Faith Estimate because you haven’t identified a property. But I can give you this other “Non-Binding Settlement Estimate” form that my legal department has authorized, that has a 2-page disclaimer stating that you can’t hold me to any of these figures.”
So the new borrower, with a confused look on his face, takes your new form and goes back to his Realtor. The Realtor calls you trying to figure out what you said to the new borrower who now, doesn’t feel so confident about you or anything else in this transaction. You explain. The Realtor calms down.
The new borrower comes back with an identified property and says; “Now I want a Good Faith Estimate.” You prepare one, in perfect accordance with the new RESPA procedures and hand it to new borrower. He gasps. “This is $3,000 more than the previous estimate you gave!”
“Oh, don’t be alarmed,” you say in your most toddler-calming voice. “This isn’t what you are really going to be paying. This is just how I have to disclose it to you.”
The new borrower gives you a sideways suspicious glance, “But what about all the fees the seller is paying on my behalf? I can’t find a credit on this form for those.”
“Don’t worry…it will all work out at closing. This is how we protect you now. We give you inaccurate information all the way up until you actually close on the property. Isn’t that fun! Kind of like a surprise party!” you happily chime - beaming like an idiot while beads of sweat run down your torso.
The new borrower marches out to his car in tearful frustration and calls the next lender on his list.
Scalpel anyone?
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