Tuesday, March 06, 2007

an interesting refinance tale

A few weeks ago I received a call from a former customer seeking a quote for a refinance. She said her lender wanted her to use their affiliated title agency but since she was happy with our service and price, she preferred to use our office.

That's not so unusual, but there ARE two unusual things that happened and I decided to take a break from the TIRBOP manual typing to share them here.

1. The lender inadvertently ordered title from the affiliated agency anyway. Though they did NOT attempt to charge the borrower for the extra title work, they faxed us a copy of the title commitment and invoice. We didn't need it, but I took a look at it anyway. I was shocked because the affiliated agency was overcharging for the loan policy.

The transaction was clearly, without question, eligible for the 70% Mortgage Loan Rate and the affiliated agency had invoiced a Reissue Rate. That's a difference of $366. These are regulated rates and the title commitment was definitely issued under the agency system so the 70% Mortgage Loan Rate was mandatory.

Aren't you glad you have an opportunity here to read the TIRBOP manual? You are going to learn how these rates work so you'll be an informed consumer.

2. Because the lender inadvertently ordered title from the affiliated agency, their loan document delivery folks screwed up and e-mailed the 1st mortgage documents to the affiliated agency. The closing was delayed.

When we received the documents, the lender chose to NOT amend the dates and asked us to amend the right of rescission form. We used white out, made a new copy to create an original with corrected dates and proceeded to close. The lender rejected the right of rescission forms even though there was no white out on the form.

They wanted new forms printed though again they did not amend the dates. They wanted us to draw a line through the old date and handwrite the new date. The dates were to be revised so that the borrower had to go through another rescission period before disbursement. I argued unsuccessfully that though the lender might prefer the strike through method, it was not a regulatory requirement, the borrower had received sufficient notice of their right to cancel, and each day of delay in the disbursement was costing the borrower $21 in extra interest on their existing mortgage.

The newly revised document was signed and the lender representative instructed us to fax it to him, then send the original via regular mail. We did so.

The transaction was set to disburse today. Our post closing manager argued all day with the lender's funding department over the right of rescission form. The funder wanted the original, not a fax. By the time the funder conceded and decided to wire funds, we had lost yet another day and the borrower lost another $21. All in all the extra days of interest paid by the borrower on the existing mortgage loan payoff, if I am counting the days correctly, came to $126.


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