GFE Closing Costs Chaos

ksn · Joined: 27 May 2005 Posts: 2 Location: Cicero, Il

Im in Cicero,Il(1st western suburb of Chicago) and my husband and I found our lender through Lendingtree.com. We were sent a quote on closing costs for a $190000 loan(0 down 0 origination fee & points), got an approval letter and signed a home purchase contract for $173000 with sellers giving us $5000 towards closing costs AND repairs(estate sale)....the city required certain repairs for purchase.
We sat with our lender and to our surprise, they had raised the quoted "underwriter fee", added an origination fee (plus other beefed up fees) because according to them they have to "use up all the money" the seller is giving us. They stated that ''its illegal to use money from sellers for anything else", including repairs, because it will seem like we are getting a "kickback from the sellers for buying their property". Then they kept asking us why we were becoming concerned about the extra and higher charges since "you arent paying for it anyways".
We have the signed paperwork stating that the $5000 is to be used for BOTH closing costs and repairs and I figured that if our realtor knew it was illegal, we wouldnt have gotten that signed agreement from the seller in the first place.
If anything, we are low on cash and wouldnt otherwise be able to have the money for the required repairs. Im almost sure that the closing costs should not be as much as they are charging for a $173000 loan. We are thinking of changing over to an acquaintance who is a loan officer.
Should I tell my realtor to brake down the seller's contribution into what will be used for closing and what will be used for repairs? What should my closing costs average here in Cicero? What do you guys think about all this?

THANK YOU!!!!!

chow · Posted: Fri May 27, 2005 5:55 pm Post subject:

Your Lender needs to follow the purchase agreement and find an Underwriter that will allow the money for the required repairs (mandated by your city for the purchase) to go into a escrow for the repairs. Besides, the minute the UW they send it to, reads the purchase agreement, they will have a few issues with this too.

This is another reason I advise people NOT to do anything but simple, straight forward loans with on line lenders. (and I am one!) 8)

Go into the member list at the top of this screen and contact "Haplo." He works in Illinois.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Thanks for the prop chow.

I'm down in Springfield (IL) and I can give you an idea of what the cost up in your area is. If you want to fax me the GFE i can help break down for you what is bogus and what's actually a genuine fee involved in the transaction.

Otherwise just send me a message via pm and we can discuss it. Like Chow said there are going to be some issues as it's presented now when they go to review it heh.

ksn · Joined: 27 May 2005 Posts: 2 Location: Cicero, Il

My husband was able to get in contact with an old friend that works in this field. He was able to explain all the mumbo jumbo..........we ended up doing our business with him instead. Closing costs were a bit lower, but you were right.....if there was any remaining balance there would be a problem with it going our way for the repairs(it would most likely go into an escrow account.
Fortunately, there will be a way for us to get money at closing(tax credit, etc.) to hand over to the contractor that will do the repairs.

Thanks for your concern!!!!!!!!!!!!!

P.S. This is GREAT place for new home buyers like us to get informed, ask questions and get second or third opinions. You guys are helping a lot of "lost" people out there......Congratulations!!! :D

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

I would hope they were a lot lower overall ;)

Glad it worked out for you!

The Big Easy · Joined: 20 Jan 2005 Posts: 30

Lending Tree is a "Blight On The Industry".

IMHO

People who use them deserve whatever happens to them. Thankfully, you are one of the few smarter ones who did not allow yourself to be steamrolled.

(stepping down from soap box)

chow · Posted: Sun May 29, 2005 10:44 pm Post subject:

TBE,

Why don't you just tell us how you feel? :lol:

BTW, When are you flying into the Windy City? I was going to drive and meet you if you went to see the D-Man. Either one, I'm game for a weekend with you and the wife. Let me know-I need to educate you on RV's.

I can tell you a story, or two or three.