The Most Unpleasant Surprises When You Close Your Mortgage Loan Application

I'm reading this excellent book by Carolyn Warren, "Mortgage Rip-offs and Money Savers."

In chapter eight, she lists the five most common unpleasant closing surprises:

* Denial of Appraisal
* Bait and Switch
* Mistakes
* Tricks at Signing
* Surprise Prepayment Penalty

If you deal with a local lender, they are more likely to understand your real estate situation, making the denial of appraisal unlikely. Another way to get around this denial is to offer a bigger down payment.

Lenders typically aren't thrilled with unique properties. They are more likely to lend money for the purchase of properties they can sell quickly and easily. The longer a lender has to hold on to a home, the more money they typically lose.

Lenders don't want some weirdo house they can't get rid of.

This is common sense.

What doesn't make sense is when the underwriter determines there's something weird about your property when it is just their quirk.

Every lender has certain quirky guidelines.

Here's where having a mortgage broker can be better than dealing directly with a bank. They can shop around various lenders to find the deal for you.

If four or more lenders deny your loan, then you might want to reconsider your purchase. Do you really want to buy something that you can't sell?

Losing one parents may be regarded as a tragedy, but losing two looks like carelessness.

Your experienced local loan officer knows about the concerns in your community. Does your house have unusual construction? Is it too small? Does it have a weird floor plan? Is it a working farm? Does it border on a freeway or a prison or a high-rise? Are there no comparable homes within range? Are there zoning issues?

You should refuse to sign for your loan if the lender adds on a bunch of junk fees such as the lender's attorney fee, the document preparation fee, endorsement fee, and document review fees.

You don't have to put up with junk fees. Stand steadfast. Refuse to sign for the loan until these fees are deleted.

Losing one appraisal may be regarded as a tragedy, but four denials and it looks like you are investing in an odd property.

What are your key weapons when dealing with a bait-and-switch scheme? There are your Good Faith Estimate, your Truth-In-Lending form and the Rate Lock Confirmation.

If your having problems with your loan officer, you can ask to talk to the manager. As you go up the corporate chain, you are more likely to receive cooperation.

Don't get nasty. Don't use profanity. Don't abuse people. That will make your complaints seem less serious. You'll become the bad guy. You'll be easier to ignore.

Carolyn says she's heard loan officer say:

* "If they're stupid enough to take it, it's their fault"
* "I bumped up the rate, because he wasn't paying attention"
* "Consumers are in a total daze. They're signing everything you put in front of them."

Mortgage Rip-offs and Money Savers reveals how the mortgage industry cheats borrowers out of billions in extra costs every year. Mortgage industry insider Carolyn Warren taps her decade of experience with lenders to expose the tricks, lies, and dirty little secrets they don't want you to know. With her expert guidance, borrowers will save tens of thousands when they avoid the traps so many consumers fall into. Having this inside information is the only way borrowers can truly get the best possible deal. This book presents that knowledge in an interesting and easy format that anyone can understand. Readers won't be victims of the mortgage industry with this invaluable resource in hand. Instead, they'll get the best possible rates, avoid bogus fees, and get the great deal they deserve.

Carolyn Warren was a mortgage industry insider for ten years, and worked in retail and wholesale lending for some of the nation's largest lenders, including Full Spectrum Lending/Countrywide Home Loans, Long Beach Mortgage/Ameriquest, First Franklin, and Green Tree Financial/Conseco.