Mortgage fraud abounds. Mortgage fraud abounds.

Tuesday, December 30, 2008

The Closing: Trust but Verify


At closing you will not only be provided the broker’s final Good Faith Estimate, you will also be expected to approve and sign your HUD-1 Final Settlement Statement which itemizes all the expenses you will be incurring to secure your mortgage. Make sure the HUD-1 agrees with the final Good Faith Estimate.

If you discover that your mortgage broker is charging a YSP or SRP (rebate) and you didn’t agree to accept anything but par pricing, you basically have two options if you wish to close escrow.

1) Accept the interest rate, making sure the rebate is credited against your closing costs , or

2) Get the broker to direct the wholesale lender to redraw your loan documents at par. If you decide to go this route, don’t accept the idea that you are responsible for paying to get your loan documents redrawn. This is a direct result of the broker’s malfeasance and he should bear the cost. If he gives you a hard time over it, let him know that you will be registering and documenting your complaint with your state’s licensing authorities and contacting the local newspaper. They love to cover consumer stories that can be thoroughly documented.