Great time to remind everyone what has a 10% tolerance, what has zero tolerance and what has no tolerance. Fee’s are important, very important! And I am fan of over-disclosure. I encourage you to make sure you are over estimating fee’s, especially the one’s that “change” the most. No offense to title and escrow companies, but I’m calling you all out. lol. Across the Nation I do loans for Broker’s that send them to my awesome underwriting team to be completed. And the biggest thing I see in fee variance is the title/escrow fees changing from what is said (in writing) to be charged for those services on a mortgage loan.
Trust me I get it. Loan amounts can change, and yeah I realize the cost of the title/escrow fee’s are ultimately associated with that. However, I’m not talking about 5 dollar differences. I’m talking about a couple hundred or in some cases over 1k difference in fee’s on mortgage loans that are disclosed upfront, and then in the end the costs go up.
Here’s a guide today on a way to combat that problem, as sometimes a LO may not know “all the fee’s” that particular company is going to charge on that “specific file” until later in the transaction. Well, 1st off, as an LO, you should be over disclosing those fee’s as a whole. If you know in your area, that what is usual and customary on a loan (say 200k), that should be rounded up on your LE and SSPL. For those Broker’s/Lenders thinking of expanding in ownership/affiliation with a title company, you should know that those title fee’s then become a ZERO tolerance item. (actually spells out = not a good business idea)! For those of you that place the exact company on the SSPL and LE to match (in section C) and the borrower “chooses” them, then those fees have a 10% tolerance. So what you disclose in the beginning can vary only 10% all the way to the end. Whereas, if the specific company said on the LE & SSPL for title fee’s is actually NOT chosen by the borrower…Well those new fee’s from a different title/escrow company can be completely different than what was disclosed. With no reproccussion (tolerance cure) by the LO. #ThursdaysTrick
Check out the video and the chart below. I didn’t make it, I just use things like this as “bible” to getting transactions done. 🙂 #knowledgeispower #disclosecorrectly #SellWell
Here’s the cheat sheet that spells it all out. One fee can be in either of the 3 categories, depends on your business and how you disclose. (And what the “borrower” chooses) 🙂
As always, Share, Interact, Like, Repeat! #SellWell
-The Mortgage JUICEman (Join Us In Creating Excitement)