Posted on 10/20/2006 5:38:42 PM PDT by Flavius
You always thought those mysterious fees at closing were a total scam. Congrats! You were right. Here's what you can do to avoid paying through the nose.
Technology has magically lowered the price of buying everything from stocks to airline tickets. But home buyers now pay eight times the closing costs they paid 40 years ago. Here's how residents of one Minnesota street were overcharged again and again on their home purchases, many by thousands of dollars. And why your street probably isn't all that different.
When Lewis Leung was buying his two-bedroom ranch in St. Louis Park, Minn. in 2004, he read up on mortgages. He got rate quotes from lenders on the Web. He even compared their good-faith estimates of the numerous extra fees he'd have to pay to close the deal.
(Excerpt) Read more at biz.yahoo.com ...
Bush's fault...
A kickback is a kickback... no matter what you call it... and doing business this way is unethical.
"On its face, title insurance seems like a fair deal. For around $1,000, a policy protects you for the life of your mortgage against the possibility that the person who sold you your home was not the full and rightful owner."
A lender's title insurance policy does the above and is issued in favor of the lender. The owner's title insurance policy is issued to the owner and protects his title to the property for as long as he owns it. Furthermore, in my state, title insurance premiums are usually based on the higher policy coverage amount (owner or lender), and the title agent should issue a title policy to the party with the lower coverage amount for a $50.00 simultaneous issue fee. What happens in most residential closings is that the title attorney will issue both policies at the full book premiums for each, and tack on the $50.00 simultaneous issue fee too. It isn't illegal, but they are overcharging home buyers for title fees.
What state are you in?
Jawja! (Georgia).
The Bush administration actually tried to do something about this madness a few years ago with a new RESPA regulation that would have allowed lenders to bundle services and charge a single guaranteed fee. (Believe it or not, current rules actually prohibit this!) It was killed by intense lobbying by the National Association of Realtors and National Association of Mortgage Brokers, aided unfortunately by Republicans like Wayne Allard. NAR is basically a criminal enterprise.
I love all the "$50 Processing Fees" and "$65 Document Preparation Fees" that always wind up on closing statements.
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