Buyers Closing Costs Increase by 37% - 08.18.10 | Vincent K. Mohr : First Priority Financial, Inc. : Fairfield, CA

Cory: (September 04, 2010 2:37pm)

@mort25 I think he means that YSP is still available, but it has to be disclosed to the borrower and the borrower has to agree to let you have it, or say that you can't and demand the lower rate with no rebate given to the LO.

mort25: (August 19, 2010 10:13am)

ssfranny Where are you working? They misinformed you and must be keeping it for them selves. We still get paid YSP.

ssfranny: (August 18, 2010 11:38pm)

Danielle: what state do you work in??

ssfranny: (August 18, 2010 11:30pm)

larth10: have you been in a cave since the first of the year??? We don't get paid YSP its a "borrower credit" if you read pg 107 of the Feds dinal rule it specifically states this.

5pence: (August 18, 2010 9:02pm)

In 1936, FDR took the podium at Madison Sq. Garden to deliver a message to critics. "We [have] had to struggle with the old enemies of peace," he said. "Business & financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob. Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me, and I welcome their hatred." .. Earlier this morning, Barack Obama took the podium at Cooper Union and delivered a rather different message to organized money. He asked not for their hatred, but for their support. "I am here today because I want to urge you to join us," he said, "in the end, not only in the best interest of our country, but also financial sector & bla bla bl

5pence: (August 18, 2010 8:56pm)

"Few today remember that a half-century ago a number of New York and Chicago's top bankers were sentenced into penitentiaries-the New Yorkers into Sing Sing-the senior partner of J.P. Morgan and Company, the president of the National City Bank, the president of Chase Bank. Every one of them had been found to be doing reprehensible financial tricks. They were selling their own friends short. They were opening their friend's mail and manipulating the stock market. They were manipulating everybody. They were way overstepping the moral limits of the privileges ethically existent for officers in the banking game, so a great housecleaning was done by the New Deal." Buckminster Fuller in the "Critical Path".

Valuequestor: (August 18, 2010 4:01pm)

I don't think I have much venom left to complain about our situation....but once more into the breach! We are now the lowest paid participants in the mortgage equation. Its not right or even remotely ethical considering our regulatory burden in terms of education, fees and risk. I sincerely hope this and other honest surveys help convince the government to set fair fees or better yet, put an end to AMCs. Thanks for your efforts! Terrence Kelly (valuequestor) I made this comment on the Survey Site. TAKE THE SURVEY! Did you know that ENTRY LEVEL peons at the AMCs and banks in Cali make $12-$15 an hour? Experienced personel (No College) in mortgage ops are advertised at $17 to $22 an hour. AMC pay for appraisers with NO bene's, NO recourse, NO rights and YOU pay ALL of your expenses.......$15-$20 an hour. BULL....!! I know.....tell me how you realy feel.

GODLIKE: (August 18, 2010 3:15pm)

Interesting quote from the Wall Street Journal - "Around 60% of all borrowers with a 30-year fixed-rate loan could lower their rate by one percentage point given current rates ... but only 38% could actually qualify for a refinanced loan because of the stricter loan standards." Mahesh Swaminathan, Senior Mortgage Strategist, Credit Suisse, quoted in The Wall Street Journal, 08.13.10

larth10: (August 18, 2010 2:29pm)

To Utah Mtg Broker...it definitely will affect the borrower. The Federal Reserve has mandated that the broker cannot receive a YSP...I don't know about you, but I can't work free, so if I can't be paid a YSP I have to charge the borrower an origination fee.

GODLIKE: (August 18, 2010 2:18pm)

Interesting tidbit. I have an extensive Evaluation & PQ sheet that I use to prequal people. I update this info needed periodically and a few minutes ago when I accidentally opened up one from the late 80's or early 90's I realized that I used to have 3 times as many blanks for bills than I need now. It had seemed to me that people had been acquiring less debt for the past 5 years or so, but I hadn't realized how much less. I used to use all the blanks and occasionally had to add more, now I barely use up the blanks I've got so I was considering dropping a couple of blanks and adding a little more NOTE room since it seems there's always some kind of extenuating circumstance that needs documentation.

Utah Mortgage&Real Estate Guy: (August 18, 2010 2:13pm)

@larth10: Your borrowers should not be affected in any way because of the new guidelines. There is no difference in the borrowers bottom line from a NO point loan with 2% Yield; to a 2 point loan with a 2 point credti from the yield spread. Their bottom line is the same and your compensation is the same. Both scenarios are IDENTICAL to the borrower and the loan officer. The unfortunate thing about this study showing that borrowers closing costs increased by 37%. Do we know if points were factored in as a cost or did they take into affect the borrower credit (Yield Credit) before averaging the total costs. I am not sure. I wouldn;t be suprised if the borrower credit was NOT factored in to these numbers. This story isn;t that effective, but it gives TBWS and Brain and Frank something to talk about. The real factor of increased costs are all the third party and administration fees increasing due to the significant increase documentation and verification.

Utah Mortgage&Real Estate Guy: (August 18, 2010 2:05pm)

@Joe: I think a better way for GODLIKE to say that loan officers were foreced into is that WE were forced into it by the borrower. These programs were made available to our competitors and if we wanted to compete (stay in the business and have a job) we needed to offer the same programs. When a borrower hears they can get into a home with $500 or less, but we needed them to put 5% plus for a down payment, we would loose 99% of all prospective clients. The Government committee that oversaw Fannie/Freddie (in 1997 and 1999) ORDERED them to change (loosen) guidelines so that EVERY AMERICAN COULD OWN A HOME. Unfortunately the risk analysis for new guidelines were contracted out to Wall Street Companies (banks & brokers). Obviously the risk analysis didn't forsee creating a housing bubble like it did. And because the entire industry was blinded by the profits for almost 10 years, no one was going to blow the whistle on this money train. Captialism at its finest.

GODLIKE: (August 18, 2010 1:28pm)

But my point wasn't the history lesson but the fact that suddenly HUD and FHA are taking on an "expanded" role with the MIP funds and I'm thinking those roles may come back and bite us as well.

GODLIKE: (August 18, 2010 1:27pm)

Where were you in 1999 Joe? Investors never gave Fannie the rules or regulations, instead Fannie & Freddie gave the Investors the rules and regulations of the loans they'd buy. Those rules and regs came from on high - that's the quasi governmental part of them. Mr. Clinton bowed to a SIG the rules were changed and those of us who had been in business for enough years could see the handwriting on the wall. Unfortunately all the handwriting was in bold print 1200 feet high.

larth10: (August 18, 2010 1:22pm)

If you think 37% is bad wait until April 1st,2011. I do 99% of my loans at 0 points for my clients and take the yield spread premium...not getting rich, but it saves my borrower's a lot of money, whether it's a purchase or refi. With the new rules in place, ie no YSP to broker, it's going to have a huge impact on the borrower. Please, will someone 'splain to me how this benefits the consumer??? It's right up there with HVCC...as one of my borrower's said to me last month, gee, a year ago when we did this appraisal it was $350...now today it's $445. What's up with that. I don't know about the rest of you, but after 28 years of doing this, I've never spent so much time apologizing to my borrower's for so many things. It's just ridiculous...what's next??

joe: (August 18, 2010 1:07pm)

@godlike: Gosh. I wonder where I was when all these stated income, 100% Fannie Mae loans for non-creditworthy borrowers were. And I wonder why I didn't get the memo about how the Gubmint was forcing Fannie and Freddie to change their guidelines. I wonder if I might trouble you for some substantiation of this? I do know that we had an awful lot of wholesale reps for now-defunct companies promoting their 100% option arms and other "alternative" products for people with lower credit scores. You say you "settled into doing them." Does that mean someone forced you into it?

GODLIKE: (August 18, 2010 12:55pm)

JOE" the investors didn't invent or promote these 100% loans they were imposed upon Fannie & Freddie by the govt. There was quite a hue and cry when they were announced but we got no where and we finally just settled into doing them. When the big crunch hit it was greater than anything we could have imagined because many other factors also came due at the same time.

Utah Mortgage&Real Estate Guy: (August 18, 2010 12:49pm)

I don't know how everybody is interpreting the new law, but as I see it.NOTHING has CHANGED. Origination is the only Compensation to the Broker/Loan Officer.The Yield Spread is a CREDIT TO THE BORROWER.Loan officers can only make money based on points they charge UPFRONT. This new rule is just a waste of 130 pages (mutiplied by however many copies are printed) and a waste of time to read.When this rule takes effect on April 1, 2010 it may level the playing field between brokers and bank LO's because of the NO UPFRONT FEE CHARGE.No more application fee's BANKS. I have been closing loans like this for 10 years. There is no reason to hide the Yield Spread and not let the borrower receive the tax benefit from your compensation. Before the 2010 GFE: I would charge an Origination that I felt comfortable with and CREDIT YIELD SPREAD to the borrower.I cannot understand what the big deal is. If you are a straight forward, honest, and competent Loan Officer, you should be making the same.

joe: (August 18, 2010 11:29am)

I agree with cluelessdad; appraisals are roughly $75 more expensive because of the AMC involvement. We moved processing out of our office to a contract processor, increasing that cost to $595 from $395. Our average net fee before GFE 2010 was 1.625%. Under the new format, we earn at least 2% on every loan. Granted, that is typically offset by YSP credited to the borrower, but the additional .375% in fee that we earn (easily justified by the greater workload) is translated to a rate roughly .125% higher. Taking into account that we now earn about .375% more on each loan, that means the total increase in cost is close to $2,000, based on a $400,000 loan amount (our typical loan). In our market, that represents a cost increase to the consumer quite a bit more than 37%. I'd be more than happy to go back to a lower fee if loans did not take so much labor to get funded.

AdamP: (August 18, 2010 11:26am)

michaelmwinn: Good idea about stopping the BPO's. NAR needs to spearhead a boycott of BPO's. Tell the banks to call an independent appraiser for an opinion.

michaelmwinn: (August 18, 2010 11:08am)

you guys discussed appraiser's jobs today and I wanted to add a little, in my office agents take jobs to do BPOs for the banks and the pay stinks. We need to stop taking BPOs all together. Appraisal $325= BPO $50????

AdamP: (August 18, 2010 10:55am)

RE increase in closing costs: It's called mordida. The man is taking a bigger bite now. It's only getting worse under the Obama admin.

MartyQ: (August 18, 2010 10:52am)

I don't see the increase of 37%. I am not charging any additional fees for transacting my business, but I am absorbing more fees (3rd party verifs of SSN, Tax Transcripts). More work, less pay is what I see...

OKGary: (August 18, 2010 10:37am)

Hmm...gov't gets (more) involved...gov't officials and big banks point the finger at mortgage brokers...banks now originating a MUCH higher percentage of mortgage transactions (85% by some estimates)...cost to consumers goes up. Anyone surprised? BTW, thanks guys for the "clean" show today, I believe I can post this one.

Clulessdad: (August 18, 2010 10:30am)

Lendershop-on the contrary, the article said year over year. Appraisals have gone up $150-300 ea with the AMC's. Lenders fees have gone up between $150-400ea to handle all the TIL, RESPA and HVCC issues. Escrow fees have gone up $100-500 to handle RESPA and higher insurance costs. Processing fees have also gone up $100-150 from TIL, RESPA and HVCC issues. Don't forget all the work done by the processors that get unrewarded with loan turn downs, etc. Many have quit the biz. I can easily see $500-$1500 of additional fees across the whole line of third parties.

joecolorado: (August 18, 2010 10:29am)

I wouldnt think that amcs would need to comply with USPAP after all they dont DO anything, they are just a conduit to the investor,and there is no regulating their charges as its market driven!They created and maintain that market so they can pretty much tell you what the usual and customary fees are.....usually what they decide to pay...but that fee scale they use is also supported by loaner55's appraiser that is doing low cost appraisals for $14+/-Hr.go figure.He is busy 'cos he permits the amcs to tell him what his worth is....which is apparently very little and until he gets some backbone he will still be making $14/Hr until the cows come home.I get having to support a family so dont get me wrong,but he isnt SEEING his family at all,'cos he is too busy busting his buns getting cheap ass work in to visit with them.Who suffers?certainly not the Silas Marner amc's

lendershop: (August 18, 2010 10:20am)

Closings costs went up because we as brokers aren't allowed to receive yield spread anymore since January 2010. Even on a " no points" closing. We as brokers charge roughly 2 points origination fees and then receive 2 points from the Borrower( paid from the borrowers yield spread received for the rate they chose.) so I think it's a false argument to say costs have gone up for borrowers.

joe: (August 18, 2010 10:18am)

@godlike: guidelines imposed on the GFEs by the government? Wow. How about this scenario, instead: investors create 100% CLTV, stated income, stated asset programs down to a 585 FICO. They do this because those loans can be securitized and insured (think AIG and Credit Default Swaps). Because there was a secondary market for those loans, mortgage bankers funded them. That's the business they're in. The outcome of those "perfect storm" loans was inevitable. That triggered the credit crisis, leading to the falling of already overbought real estate values. Many people who had taken Fannie/Freddie loans were now deeply underwater and chose to enter into short sales or strategic foreclosures. Others were unable to make their payments because their incomes had declined in the recession. I defy you to show me how it was "the guidelines imposed upon them by the Govt." that caused the problems we have now.

cpappraisal: (August 18, 2010 10:17am)

CentFlaAppr-They get away with it because they are all in house AMC's for the big banks. They have made over 55 billion dollars last year taken out of appraisers pockets with their in house AMC companies.

CentFlaAppr: (August 18, 2010 10:14am)

It seems to me that it should be a requirement that AMC's comply with USPAP. Since they are taking a large portion of the fee reported to be for the "appraisal" then how can they behave in ways that grossly violate USPAP? As a 20-year veteran of this industry who spent 10 hours last month taking continuing education USPAP course, it's apalling what the AMC's get away with. Also, shouldn't AMC's be required to keep funds in an escrow account when they are collecting them from a borrower, to be paid to an appraiser at some later date? We had an AMC go bust last year in Florida and all of the money disappeared. How can the market be so overly regulated at this time, but these rogue companies are running amok?

joecolorado: (August 18, 2010 9:53am)

amcs dont base their fee on value when offering the job to appraisers.They base their offer on customary and usual fees from the open market................riiiiggghht...tThey base their fee on profit margin just like any other unecessary tier of management.

joecolorado: (August 18, 2010 9:51am)

Artisan: basing fees on value is a violation of USPAP............ONLY FOR APPRAISERS and in Colorado you could lose your license or have it sanctioned for less than that. No one else needs to comply with USPAP so,theoretically no harm or fault or undue influence has been experienced.

CentFlaAppr: (August 18, 2010 9:20am)

Regarding earlier post by Artisan: It is my understanding that if an appraiser quotes a fee based on the value of the real estate it is a violation of USPAP. How can AMC's quote a fee based on estimated value being above or below $500K? I bet they pay the appraiser the same fee even when they collect the extra money. Is there a blog or list somewhere with posts of AMC's that do not pay or do we each individually have to keep getting suckered in by criminals who collect the borrower's money in advance and then keep it somewhere in the range of 90 days or forever.

5pence: (August 18, 2010 9:08am)

Maybe the actual addresses the brokers would know? Since they sometimes have to send in a physical report. We need to make a list of where these roaches are.

5pence: (August 18, 2010 9:05am)

Why don't you appraisers find out where AMC branches are located in your state and then boycott in front of them, get some press and get the public made aware? Chase/Eappraiseit: Poway Service Center, 12395 First American Way Poway, CA 92064. Danvers Service Center 5 Cherry Hill Drive, Suite 200, Danvers, MA 01923. Lenders Services (LSI): Corporate Human Resources, 601 Riverside Avenue, Jacksonville, FL 32204. We need to find out where their "arms" are located so we can confront the crooks at their places of business. A list of their locations around the country would certainly help. If anybody knows any address, verfiable, then we need to make a list. Nothing wrong with boycotting a product that causes consumer harm. You would boycott if they were trying to force you to buy rotten eggs, right? Same thing in what the AMC's are forcing on consumers. Where are they located ?!!!!

cpappraisal: (August 18, 2010 8:57am)

EVERYONE-Make sure you go to this website and voice your opinion in regards to appraisal and HVCC. They want to hear what we have to say before the rules are implimented...http://www.fdic.gov/regulations/reform/index.html

Owl Tree: (August 18, 2010 8:36am)

Which State had the highest increase?.....if you guessed The Barony of Cuomo, you win a DU Refi Plus with Property Inspection Waiver.

Owl Tree: (August 18, 2010 8:34am)

My base closing costs have not increased at all. However, HVCC has resulted in 2, sometimes 3 appraisals being ordered in order to close my customer's loans. So, that extra $350-$700 is taken away from what I could normally credit back to my customer.

tkearns: (August 18, 2010 8:14am)

More regulation favors larger companiies and fewer of them who have much more setup and post-closing work. Fewer companies means less competiton and higher costs. We need more, smaller companies originating and funding loans. The new reg's have added an entire new phase to the loan process; setup. Setup takes as long as underwriting with the great majority of lenders. Thanks Barney!

JUSTFRANK101: (August 18, 2010 8:11am)

I wish there was an organization that specifically represented Real Estate Appraisers like a Union. An organization that had the Appraisers back when the poop hit the fan, like a good union. An organization that assisted with required continued education assisted or provided a Training Program where Trainees are not humiliated or mentally abused, like an Apprenticeship and most important had representation within the United States Government. The dues actually counted for something gaining a respect the profession deserves. The Real Estate Appraisal Profession may not fall into a Union backed organization category but there must be some type of organization that may step up to the plate. One Organization representing All Real Estate Appraisers throughout the United States of America just like the Long Shoremen or Teamsters, same organization many chapters caring for local needs.

jcollins: (August 18, 2010 8:08am)

artisan: Fight it or have the client deny the charge. We can not let these companies get away with this. Yes, it will take time but, right is right.

GODLIKE: (August 18, 2010 8:07am)

My take on the GSEs wasn't actual wrongdoing on their part causing all these foreclosures but instead it was the guidelines imposed upon them by the Govt. If they must do loans with bogus guidelines then they'll have the issues we've seen. NOW I see the Govt imposing some of their pet projects on FHA (war on homelessness and the 0% loans) will we end up with the same effects on FHA in a few years?

Artisan: (August 18, 2010 8:02am)

Appraisal Costs and AMC's, this is a good one. Landsafe( Or should I say Bank of America) charges my client $525 for a single family appraisal because they charge extra for homes valued more than $500K. The normal price is $375. The client estimates his home to be worth $550K and we submit the order as so. The appraisal comes in at $415,000, below market of course but that is another story. The client is still charged the higher fee of $525. When I question Landsafe about why they charged my client more , I am told because we estimated the value higher than $500K that it triggers the higher cost even though it appraised for less. My question to them is if I estimate a million dollar home at 475K, can I get the lower price regardless of what it comes in at, the answer of course is no. What a scam! No other business would let this fly.

joecolorado: (August 18, 2010 7:53am)

(47 appraisals at $165 = $7,755).Dont defend him.....HE IS THE PROBLEM!!!!!!!he is doing crap appraisal for peanuts.Tell him to stop whoring himself out as its ruining the usual and typical fee levels the amcs are using against the rest of us.And 7000 miles....WHERE was he going to do the appraisals as thats 148.9 miles PER APPRAISAL!18Hrs x 30days = 540 workhours=11.49 hours per appraisal,that equates to $14.36 per hour.He needs to reassess his priorities as he is wasting too much time driving and not enough figuring out his true worth.

williamk2v: (August 18, 2010 7:53am)

Thanks, Frank and Brian, for putting a link to The Appraisal Show "Customary and Reasonable Fee Survey" on the show. Now all of you who have an idea of what a customary and reasonable fee should be, TAKE THE SURVEY!!! The survey is open to appraisers, lenders, agents, brokers; in fact, it's open to anyone who performs, orders or uses appraisals.

jcollins: (August 18, 2010 7:47am)

philromanow:: That is what I was thinking as well. Makes complete sense.

jcollins: (August 18, 2010 7:46am)

philromanow:: That is what I was thinking as well. Makes complete sense.

GaryP: (August 18, 2010 7:45am)

Danielle: Yes, that's how its done on HUD REO's. Obviously, neither the loan officer or realtor had any experience in how these deals are done. I just got a HUD REO deal last night and we are dealng with similar issues. We're doing an FHA 203K (purchase + improvements) loan and the existing HUD appraisal is based on a 203B (purchase or refi) loan. We're trying to fuigure out if we need to get the existing HUD appraisal modified, or a totally new one.

cpappraisal: (August 18, 2010 7:45am)

ehillard-I am suprised the appraiser even got paid that and yes it take on average for us to get paid 60-90 days if we get paid at all. That is why most appraisers the good ones at least have moved on to better things like maybe prostitution....LOL

jcollins: (August 18, 2010 7:43am)

The 36%. Can you give us the article. Do they explain what fees went up? I know here in CA if you use a S. CA Escrow/TITLE co. the fees are about double.

SGreek: (August 18, 2010 7:40am)

Ill Appraiser: I do believe that is a play on the words, "Current" & "Currency". I think its also called "marketing". :-)

philromanow: (August 18, 2010 7:39am)

Closing costs increased partly due to buyer paid closing costs. Historically, seller paid for owners title policy and doc stamps on the deed. So a 100,000 purchase owner title policy is 575 and in Florida doc stamps on the deed is 700. That is 1275 increase that previously was paid by seller. Asset managers, fnma, hud, freddie mac are not paying, so if the buyer wants the house, they pay.

loaner55: (August 18, 2010 7:37am)

ehilliard - Wow, an appraiser you know gets $300 for a $450 appraisal? Let me know where so I can tell my former appraiser. He is getting $165 for a $425 appraisal. Last month he did 47 appraisals, drove over 7000 miles to do them, worked 18 hours a day 7 days a week to make about $4k. Nice job Cuomo...... I hope you get infested by bed bugs!

tbwbrian: (August 18, 2010 7:34am)

thats actually the site name. current cy get it current cy. Now its a great site but not sure if they're peggin the clever meter with that one.

cpappraisal: (August 18, 2010 7:34am)

What is that number again that the big banks have made off of us appraisers with their in house AMC's? Like 55billion isn't it?

Ill Appraiser: (August 18, 2010 7:21am)

Brian/Frank - The banner at the bottom of the page for Mortgage Currentcy? Spell check. I saw this before but I was certain it would be noticed and corrected.

jcollins: (August 18, 2010 7:19am)

Does the 36% take into consideration the origination going up. (GFE2010) I know my fees have gone up a little but, mainly in processing fees.

jcollins: (August 18, 2010 7:18am)

Does the 36% take into consideration the origination going up. (GFE2010) I know my fees have gone up a little but, mainly in processing fees.

Bono Vox: (August 18, 2010 7:14am)

Did an "expert" really go on GMA this morning and state that one could only by a home with 20% down and a 730 score?? Please tell me I'm misinformed!

Bono Vox: (August 18, 2010 7:13am)

Great article in WSJ today on private investors bailing out underwater homeowners. Investor buys loan pool for pennies on the dollar, cuts principal and rate - everyone wins. Brian - you look better with hair, but not as intimidating.

DanSchweihs: (August 18, 2010 7:07am)

The too-big-to-fail banks are already Government Sponsored Entities with implied government guarantees. They are sponsored by the government through special regulation. The government has guaranteed them against failure because although a government bureaucrat has the power to shut them down under the new financial reform laws, no government bureaucrat will ever have the guts to pull the plug on Bank of America. Have you ever watched a dog chase a car and said: “What will the dog do if it catches the car.” Today, the executive branch has caught the car and they have no idea what to do. The bad news is that they continue to get advice from the lobbyists at the too-big-to-fail banks. That advice is always the same: eliminate our competition; make us bigger; and everything will be OK. The government will probably follow this advice again. Is Uncle Sam doing the same thing over and over again expecting different results?

brainstewn: (August 18, 2010 7:07am)

AMC's represent the back room deals that go on between congress members and lobbyist. Clearly they serve no purpose that: fines, suspension or jail time couldn't cure with a little fear mongering (publicity) that the mainstream media could do.

Danielle: (August 18, 2010 6:55am)

Cont. - By the way, the HUD REO appraised higher than our original offer, which we knew it would, because it was a good deal. HUD has many rules about unallowed fees to the buyer, but the title company still charges them or a goof up is made, then the LO gets stuck with a hard file if they can get a lender to close them, for less pay.

Danielle: (August 18, 2010 6:52am)

@ FLrelo and GaryP - I just closed a HUD REO, and we bid higher than the asking price to make sure we got it. What neither HUD's rep Cityside nor the realtor for the HUD property NOR MY LENDER mentioned was that I HAD to use the appraisal already in possession by HUD. Cityside didn't even mention that they had an appraisal nor did they put it in the listing attachments. So, the lender let me order, clear stips on, and get approved a whole new HVCC appraisal that never should have happened. You CANNOT depend on your lender or HUD to tell you anything. They bury it on their extensive, convoluted website and expect you to know. So, of course, the buyer was not allowed to pay for the appraisal, and I had to pay it. Oh, and of course their asking price was at the appraisal amount of the HUD appraisal which made my contract price higher than the appraised value, so to prevent my clients from coming up with more money, we had to cancel the contract and rebid on it, with the loss of the EMD.

ehilliard: (August 18, 2010 6:43am)

I just had an Appraiser call me the client to set the appointment! then called back 10 mins later to cancel. I got the client to call them back and ask why!! ARE YOU READY? They have done 3 previous appraisal for the AMC and had not gotten PAID!!!! OVER 90 DAYS NOW! Oh, and the AMC charges 450 for FHA appraisals and the Appaiser gets 300, nice mark up!

joecolorado: (August 18, 2010 6:34am)

Dont blame that outrageous cost on the appraiser,that's not what the appraiser was paid believe me.The actual non negotiable appraisal fee I can guarantee was very much less than that,the excess is admin fees from the amc,so make sure your borrower is aware of that fact,although they probably dont care about semantics as it still cost them $975.If you complain to the investor about these costs,it will only result in the appraiser getting paid less as the amc wont be reducing their fees to accommodate the request to drop the cost.The answer is to separate the fee structure to illustrate both the actual appraiser fee and the actual amc fee.Put the blame where it should be, on the amc's additional fee structure.As an appraiser I have no problem justifying my fees,but not the fee for the cost of an appraisal,I cant negotiate my fees as they are pretty much set by the amc,but I dont accept any fee that is lower than my worth.my fees have been static for the last 25 Yrs,so blame the amc.

drez: (August 18, 2010 6:05am)

just had a great nonowner appraisal cost consumer.....$975 for a freaking urban stickbuilt...are you kidding me!

drez: (August 18, 2010 6:04am)

just had a great nonowner appraisal cost consumer.....$975 for a freaking urban stickbuilt...are you kidding me!

kkric: (August 18, 2010 5:57am)

The top government people are not stupid - actually very intelligent. So, they know what the rusults of their actions will be. It is just their interests are not the same as ours. Tim Geitner is a tool of the BIG banks, and Andrew Cuomo is just to tool. And, of course, they are primarily politically motivated. With Cuomo running for gov in NY, why not start a letter writing campaign calling HVCC what it is - a 10 billion a year TAX on homeowners. Do you think he could get elected if voters knew he was responsible for a 10 billion TAX on homeowners, and that HVCC has been a HUGE factor in driving down their home prices? Of course, Fannie/Freddie/FHA knew this new paperwork crap would drive prices up. But, their interests were political. They had to be seen as doing something to rein in abusive practices (pointing the blame elsewhere).

FLrelo: (August 18, 2010 5:44am)

Thanks GaryP! Not good news for me. Unfortunately, their delay at FHA is now going to cause another appraisal to be generated. Uuggghhh! I'll never get this file closed!!

GaryP: (August 18, 2010 5:35am)

FLRelo: Yes that is true about FHA appraisals, its now 120 days, even on HUD REOs. I was doing a loan on a HUD REO when that rule first rolled out last spring. Not only did we have to get a new appraisal, we had to wait weeks for the HUD regional office in Denver to approve the new appraisal so that we could close. In the meantime, they required my client to pay $15/day for a contract extension while they tried to figure out what to do. What a joke. By the time it was all over with, I ended up paying for the new appraisal.

GaryP: (August 18, 2010 5:31am)

Why would anyone be surprised that costs are up? Theamount of verification being required by both processors and underwriters has skyrocketed in the attempt to create "risk free" loans. On top of that, we have the additional layering of AMC profit to those costs. Meanwhile, we have had a decline in loan volume which means that LO's are being forced to make more per transaction to pay their bills. That means that the origination fees are increasing as well. The combination of additional regulation as well as tightening guidelines has led to the perfect storm in regards to closing costs. There are always "unintended consequences" to any regulatory change. Higher costs is just one item on the long list of these. We all knew that the new GFE was a jole when it was rolled out. Just more useless paper. Now, they are talking about overhauling it again. Go figure. The latest buzz is that the new consumer finance protection agency intends to combine it with the TIL.

FLrelo: (August 18, 2010 5:30am)

Has anyone else heard that FHA appraisals are now only good for 4 months instead of 6? With the weekly changes in financial regulation, I guess this one slipped by. Let me know if you have heard the same. Thanks!

GaryP: (August 18, 2010 5:20am)

Larryw: I guess you missed the final rule on Reg Z that the Fed came out with on Monday. The future you portray is now, or at least when it is implented on April 1. The new rule pretty much mirrors the Merkley amendment to the Dodd/Frank bill. I'm surprised that Frank & Brian haven't mentioned this yet. Maybe they are like the rest of us, just trying to digest 130+ pages and see what it really means to us and to the industry. Maybe I am reading it wrong, but the way that I read it, the only way that we will survive as originators is to go to work for one of the big banks and be willing to punch a clock and accept a small "origination bonus." Obviously, I hope that I am wrong.

Divedude: (August 18, 2010 5:12am)

Great info on increased closing costs. I have always felt that the consumer would be the best weapon against AMCs'. Every borrower should be made aware that AMCs' are a by product of the big banks and how their cost was shoved down their throats. The drag AMCs'place on the mortgage process when you consider what they actually do boggles the mind. Untrained order takers calling for a status an hour after placing an appraisal order? Sending comps courtesy of their client in order to increase a value? What a joke! The consumer will eventually just say, "No more!" when they realize the irony. While the government obviously rewards stupidity, the consumer will not.

ZMortgageMan: (August 18, 2010 5:10am)

Undersriters are tight, tight, tignt. I think they want us to roll over and play dead.

ZMortgageMan: (August 18, 2010 5:09am)

We haven't seen such a big increase in closing costs but have seen longer lead times from the lenders. In addition we're seeing major lists of stips on every loan package. We our staff continues to deal with the stips the lender eventually gives a clear to close. What a pain. Reminds me of the mid 90's.

ZMortgageMan: (August 18, 2010 5:08am)

We haven't seen such a big increase in closing costs but have seen longer lead times from the lenders. In addition we're seeing major lists of stips on every loan package. We our staff continues to deal with the stips the lender eventually gives a clear to close. What a pain. Reminds me of the mid 90's.

Clulessdad: (August 18, 2010 5:07am)

Doesn't everyone remember that HUD estimated that the borrowers costs would go down by $750 per deal when they came out with the new GFE? LMAO

Noel Cookman: (August 18, 2010 4:38am)

Doc prep time has increased 3-fold from what we've heard. This, due to the new regs. We haven't seen comparable increase of costs in that department; but, it's coming no doubt.

larryw: (August 18, 2010 2:03am)

My guess for the GSE's 1) Govt starts a new entity to replace GSE's. 2) New entity has no bad debt. A good thing. 3) Old GSE's are a shell corp & retain the bad debt (hello taxpayers - a bad thing) 4) New entity standardizes rates & commissions nationally in the name of "eliminating discrimination" because it must be discrimination if the Jones' get 5% and the Smiths get 5.25%. Plus, you cannot let those loan brokers just charge anything they want on Govt loans! Dems will feel that it all HAS to be regulated! 5) Standarized rates work off grid for LTV and FICO. 6) Commissions will be low. 7) Banks become the clearing houses for these "Govt" loans and will be able to profit from them based on volume + eliminating LO's. The new "Govt" loans will be handled by admin staff. Turn times will soar, but that is the cost of business if you want a "Govt" loan. 8) Brokers will be the home of the "niche" products - which will make a comeback (within reason)when the market recovers.