Have I Been Suckered on Mortgage Fees?
March 15, 1998
"A few days before my loan was scheduled to close, I was informed about a number of charges that had never surfaced until then: "lender's attorney fee," " document preparation fee," " endorsement fee," and "document review" fee, adding up to an additional $475. The loan officer said that these fees merely reimbursed the lender for expenses, and if he hadn't mentioned them before he was very sorry. I was not going to torpedo my home purchase for $475 but I hate to think that I have been suckered. Have I?"
Welcome to the club, but don't feel too badly. Others have been suckered for a lot more without suspecting a thing!
In the home appliance market, unscrupulous dealers use a "bait and switch" gambit where they are sorry but they just sold the last of the advertised special; however, they have another great item to show you. The counterpart of bait and switch in the home mortgage market is "bait and remember". Certain settlement costs are overlooked until late in the process when they are "remembered" -- by which time it is too late for the borrower to back out.
Next time, pin down the lender before you commit yourself. You can do this by providing the lender with your settlement sheet and asking that it be filled out and then initialed. [Check out the article How to Shop Settlement Costs].
"A few days before my loan was scheduled to close, I was informed about a number of charges that had never surfaced until then: "lender's attorney fee," " document preparation fee," " endorsement fee," and "document review" fee, adding up to an additional $475. The loan officer said that these fees merely reimbursed the lender for expenses, and if he hadn't mentioned them before he was very sorry. I was not going to torpedo my home purchase for $475 but I hate to think that I have been suckered. Have I?"
Welcome to the club, but don't feel too badly. Others have been suckered for a lot more without suspecting a thing!
In the home appliance market, unscrupulous dealers use a "bait and switch" gambit where they are sorry but they just sold the last of the advertised special; however, they have another great item to show you. The counterpart of bait and switch in the home mortgage market is "bait and remember". Certain settlement costs are overlooked until late in the process when they are "remembered" -- by which time it is too late for the borrower to back out.
Next time, pin down the lender before you commit yourself. You can do this by providing the lender with your settlement sheet and asking that it be filled out and then initialed. [Check out the article How to Shop Settlement Costs].