What Every Homeowner Should Know About RESPA

If you’re in the market for a mortgage to buy or refinance your existing home loan, there are several things you should know about the Real Estate Settlement Procedures Act (RESPA) to avoid making common mortgage mistakes. Until recently this law did very little to protect homeowners from predatory lenders and did more to help big banks. This year the laws protecting homeowners from mortgage broker abuses were changed; however, banks are still exempt. Here are several things you need to know about RESPA to avoid overpaying for your next home loan when refinancing.

Avoid Common Mortgage Mistakes

Whether you’re searching for the best refinance rates or trying to find the lowest closing costs when purchasing your home, one of the factors that determines how good of a deal you’re getting is the loan origination fee and closing costs. If you’re refinancing your home loan you’ll need to recoup these expenses before realizing any benefit from a lower payment amount. Overpaying the loan origination fee or paying junk fees at closing lengthens the amount of time it takes to recoup your expenses when mortgage refinancing and takes cash out your pocket.

What’s Wrong With RESPA?

The biggest problem with the Real Estate Settlement Procedures Act is that your bank is exempt from the law. If you’re considering bank mortgage rates for your next home loan you should know that in the 1990s the Banking Lobby spent millions of dollars lobbying Congress to be excluded from this important legislation and succeeded. Your bank is exempt from all the protections provided by RESPA and is required only to give you an Annual Percentage Rate based on a fictitious Good Faith Estimate created by the bank’s marketing department. Why would you ever trust something as important as your home loan to a lender that doesn’t have to play by the rules?

RESPA Changes For Mortgage Brokers

In 2011 the rules regarding broker compensation changed for the better. Your broker gets paid for arranging your home loan in one of two ways. The broker can charge you a loan origination fee for the work they do or accept compensation from the lender in exchange for marking up your interest rate. Prior to 2011 brokers could get paid both ways; however, today it’s only one or the other. Many brokers will try to sell you a no fee refinance instead of paying the origination fee and closing costs yourself, telling you it’s better to let the lenders pay the fees for you.

Refinance No Closing Costs

So what’s the problem with these refinance no closing costs offers anyway? The problem is what the lender paying the mortgage origination fee and closing costs does to your payment amount. Here’s an example to illustrate my point. Suppose for instance your mortgage refi is for $225,000. The broker quotes you the best refinance rates at 5 percent; however, if you opt for the no fee refinance offer your interest rate goes to 5.5%. What does this markup do to your monthly payment amount?

If your mortgage refi is for a fixed-rate, 30-year home loan at 5.5 percent your monthly payment will be $1,280. If you had the lenders best refinance rates at 5.0 percent your payment would only be $1,200 per month. That’s a difference of $960 a year you’re paying extra just to cover the origination fee and closing costs. Five short years later you’ll have paid almost $5,000 for just over three grand in fees and ten years this balloons to $9,600.

Beware Mortgage Broker Tricks

Most brokers tell you that the average homeowner only keeps their home loan for four years before mortgage refinancing again. If you do this you’ll be paying these fees all over again plus starting the amortization of your home loan from scratch. Keep in mind that your home is probably the most important purchase you’ll make during your lifetime and this isn’t a car loan we’re talking about…it’s a thirty year home loan. Don’t let a fast talking broker bait you into overpaying for next mortgage refi.

You can learn more about getting the best refinance mortgage for your next home loan without paying junk fees or unwanted markup of your interest rate by checking out my free Underground Mortgage Videos.

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Great SunTrust Mortgage Review

If you’re thinking about mortgage refinancing or purchasing your home with SunTrust Mortgage, there are several things you’ll want to know before signing on the dotted line. Choosing the right mortgage company or person to arrange your next home loan is your most important task when avoiding junk fees and unnecessary mortgage rate markup. Here is my review of SunTrust Mortgage and several tips that can save you as much as $1200 per year on your next home loan.

SunTrust Mortgage

Visit SunTrust Mortgage’s website and you’ll discover they are fully-owned subsidiary of SunTrust Bank. Based out of Atlanta and operating in DC,
Maryland, Virginia, the Carolinas, Georgia, Tennessee, Alabama and Florida they claim to have $172 billion dollars in assets. As a mortgage lender they have working relationships with mortgage brokers in 49 states and services loans in all 50 states employing 4,137 people.

Searching Google for SunTrust Mortgage reveals their website, contact information, and several customer complaints filed with the Better Business Bureau.

SunTrust Mortgage Contact Information

Website: http://www.suntrustmortgage.com
Customer Service: 1-800-634-7928 Mon-Fri 8am to 8pm Eastern
(Saturday 9am to 3pm Eastern)
Address: SunTrust Mortgage 501 East Pratt Street, Baltimore, MD 21279

SunTrust Mortgage Review

My review of SunTrust Mortgage covers the retail nature of home loans offered by big banks. Bank mortgage lending is not regulated by your State like it is when you take out a home loan from a mortgage broker. Mortgage banking is regulated by the Federal Government and legislation known as the Real Estate Settlement Procedures Act (RESPA). What you might not know about RESPA laws is that the Banking Lobby had these laws changed to exclude banks from having to disclose their markup and profit margin on your home loan.

This means that whatever profit the bank realizes when selling your loan on the secondary market does not have to be disclosed to you. Your bank knows that home loans with higher than market mortgage rates bring in a premium profit known as Service Release Premium for the bank. This also means the bank has an incentive for overcharging you and is not required to disclose what they’re doing thanks to this little known loophole in the RESPA laws.

It is because of this loophole that I recommend people work with a local mortgage broker licensed by their State who is not exempt from RESPA and is required to disclose all of their markup, fees, and profit margin on the home loans they originate.

SunTrust Mortgage Complaints

According to the Better Business Bureau website there have been 199 complaints against SunTrust Mortgage during the past 36 months. The standard reporting period for the BBB is the previous 36 months and during the past year SunTrust Mortgage resolved 95 of these complaints.

If you’ve had dealings with SunTrust Mortgage, positive or negative experiences, please leave a comment below. Should you refinance your home loan with SunTrust Mortgage? I don’t recommend banks as a whole for the reasons I’ve discussed in this article. Banks simply do not offer wholesale mortgage rates to their customers. If you want the lowest possible mortgage rate and payment amount for your next home loan wholesale, also known as par mortgage rates are the way to go.

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Check out my free Underground Mortgage Refinancing Videos and you’ll discover how easy it is to save thousands of dollars getting the best refinance rates without paying unnecessary markup or lender junk fees.

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Comerica Bank Review

comerica Comerica Bank ReviewAre you considering refinancing your home with Comerica Bank and want an objective review prior to signing on the dotted line? Banks can be a fast and convenient way of refinancing your home loan; however, there are several things you need to know about Comerica Bank and banks in general before refinancing your mortgage loan. Here is my Comerica Bank Review to help you make an informed decision before refinancing your home mortgage loan.

Comerica Bank Mortgage

Comerica Bank is a part of Comerica Inc, NYSE: CMA and has their corporate headquarters in Dallas Texas. Comerica Bank offers a variety of banking products including personal checking and savings accounts, business accounts, investments, debit cards for Social Security recipients, and mortgage loans. I was able to locate a handful of contact phone numbers as well as a number of customer complaints.

Comerica Bank Contact Information

Comerica Bank’s website is located at http://www.comerica.com. The bank is a publicly traded company overseen by a board of directors. Their corporate address is: Comerica Bank Tower, 1717 Main Street Dallas, TX 75201. According to the website Comerica Bank is a financial services company focusing on the three segments of business banking, consumer banking, and investments.

Comerica Bank Contact Numbers:
(214) 630-3030
(800) 266-3742 Eastern Time Zone
(800) 292-1300
(800) 925-2160 Central Time Zone
(800) 569-1400
(800) 522-2265 Mount/Pacific Time Zone
(800) 572-6620 Lost/Stolen Cards

Comerica Bank Complaints

Searching Google or “Comerica Bank Complaints” reveals 15,900 results as of the time of this writing, significantly less than Bank of America. Does this mean you should refinance your home loan with Comerica Bank? You should know there are several compelling reasons to avoid any bank when refinancing your home loan which I’ll get to shortly. The Better Business Bureau assigned Comerica Bank a rating of A+. The BBB ranks businesses by a rating that ranges from F- to A+. During the last 36 months of the BBB reporting period there were 11 complaints filed against Comerica Bank, again significantly lower than Bank of America.

Should You Get a Mortgage Loan from Comerica Bank?

The problem with mortgage loans from Comerica Bank is same problem with taking out a home loan from any bank. This problem comes from the fact that Comerica Bank is exempt from the Real Estate Settlement Procedures Act (RESPA) and is not required to disclose their profit margin on your loan. Banks incorporate Service Release Premium into their rate sheets and because of the RESPA loophole are not required to disclose how much higher their bank rates are compared to wholesale mortgage rates. You would think banks would want to be competitive with the rest of the mortgage industry; however, banks rely on the fact that most homeowners just don’t know better and happily overcharge their customers. Because the bank is exempt from this key disclosure legislation known as RESPA the only way you’ll see their markup is to compare Comerica Bank’s mortgage rates to those offered by wholesale lenders before making a decision.

Bankers will tell you that you can’t get wholesale mortgage rates for your home loan and that this isn’t a valid comparison; however, getting wholesale rates isn’t difficult for the average homeowner if you find the right person to arrange your next mortgage loan. It is possible to refinance your home with a wholesale mortgage rate paying a flat origination fee of one percent without paying any bank junk fees.

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You can learn more about paying less for your next home loan by checking out my free Underground Mortgage Videos.

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Best Mortgage Rates

If you’re thinking about refinancing your home mortgage loan you’ll want the best mortgage rates you can get for the new loan. Did you know that 99% of your neighbors are overpaying for their home loans because they went shopping for the best mortgage rates the wrong way? Here are my favorite tips and tricks to help you get the best mortgage rates when refinancing your home mortgage loan without paying any junk fees or markup.

Getting The Best Mortgage Rates Online

Getting the best mortgage rates on the Internet is trickier than you think. What you don’t know about every mortgage quote you find online or get from your local mortgage company is that the mortgage rates have all been marked up to create an “extra” commission for someone. If you want the best mortgage rates when refinancing your home loan you’ll have to find one that hasn’t been marked up. Why are mortgage rates marked up for this commission? Mortgage lenders pay a kickback for home loans that close with higher than necessary mortgage rates because these home loans bring them premium profits when sold to investors on the secondary mortgage market. Mortgage lenders don’t care that this markup drives up your payment by hundreds of dollars per month unnecessarily; these companies are motivated only by greed and their bottom line. If you want the best mortgage rates for your home loan you need to know that the mortgage lender and broker are not looking out for you; judge every loan offer with a healthy dose of skepticism and you’ll be on your way to actually getting the best mortgage rates.

Mortgage Rate Markup

What is this markup of your mortgage rates that drives your payment up unnecessarily? The fee paid by wholesale lenders for mortgage loans that are locked and closed with higher than necessary mortgage rates is called Yield Spread Premium. Provided you don’t refinance your home with your bank, the person arranging your home loan receives one percent of your loan amount for every .25 percent they markup your mortgage rate. Yield Spread Premium is paid in addition to any fees you’re paying for loan origination to the mortgage company or broker arranging your home loan.

Refinance Mortgage Rates
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Here’s a quick video about finding the lowest
mortgage rates when refinancing your home loan online.

Before you go saying you’ll just avoid all this Yield Spread Premium nonsense by refinancing with your bank, you should know that while banks don’t collect Yield Spread Premium on their loans they do collect a profit margin known as Service Release Premium when your home loan is sold to investors on the secondary market, just like wholesale lenders. Your bank is also exempt from the Real Estate Settlement Procedures Act, meaning they don’t have to disclose their profit margin or markup on your home loan. Banks markup their mortgage rates just like mortgage brokers because they make a premium profit selling your home loan later on. Your bank will never tell you they’re doing this because all they’re required to give you prior to closing is a Good Faith Estimate and Annual Percentage rate, both of which are based on low-balled fees given in “good-faith.” You’ll never get the best mortgage rates refinancing your home loan with your bank.

How to Get the Best Mortgage Rates

Getting the best mortgage rates when refinancing your home isn’t as difficult as you think; you don’t have to be a financial guru to get the best mortgage rates, you just have to find the right person to arrange your loan. Shopping for a mortgage loan isn’t like shopping for a new television or kitchen appliance; comparing mortgage quotes from dozens of lenders will only get you the best of the worst home loans available and this is why most of your neighbors pay too much for their mortgage loans.

Finding the right person to arrange your next home loan means finding an independent mortgage broker willing to work for a flat origination fee without marking up your mortgage rate for Yield Spread Premium. Finding the right mortgage broker can be tricky because many brokers are unwilling or unable to negotiate the kind of deal that doesn’t include Yield Spread Premium because of their overhead costs. Mortgage brokers working out of posh office spaces that employ expensive sales staff will generally not agree to home loans that do not include Yield Spread Premium.

How do you find the right mortgage broker to give you the best mortgage rates? Remember that only mortgage brokers have access to wholesale mortgage rates and this is your goal for refinancing with the best mortgage rates. The best mortgage rates on any given day are going to be as close to “par” as you can get them. Par mortgage rates is a term meaning you don’t have to pay discount points to qualify for a specific mortgage rate and of course that the mortgage rate does not create Yield Spread Premium for the mortgage broker arranging your loan. A discount point is the equivalent of one percent of your loan amount and is a fee due at closing. Mortgage rates are still very low and the benefits of paying discount points are far less than they used to be in the 1980s when mortgage rates were much higher than they are today. In most cases you will want to avoid paying discount points whenever possible.

Getting back to finding the right mortgage broker to arrange your home loan with a par mortgage rate, you want to look for the smaller, self-employed mortgage brokers that don’t have expensive overhead therefore avoiding junk fees and mortgage rate markup. Start by telling potential mortgage brokers that you understand how Yield Spread Premium works and will not take a home loan that includes the markup. On the subject of junk fees there are several closing costs that you’ll want to avoid when refinancing your home loan. Junk fees are the subject of my Underground Mortgage Videos; however, finding certain fees in your loan documents is a dead giveaway that you’re dealing with a dishonest mortgage broker. The number one red flag you need to keep an eye out for when refinancing your home is the mortgage rate lock fee. This is a classic example of a mortgage junk fee that serves no purpose other than boosting your mortgage broker’s profit. Mortgage lenders do not charge rate lock fees. If your mortgage broker claims there are rate lock fees you can be 100% certain you are dealing with a dishonest mortgage broke and need to find someone else to arrange your home loan.

You can learn more about avoiding mortgage junk fees and getting the best mortgage rates when refinancing your home loan by checking out my free underground mortgage refinancing videos.

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Mortgage Bank or Broker?

save your credit Mortgage Bank or Broker?

If you’re considering refinancing your home mortgage loan is it better to refinance with a mortgage bank or a broker? There are advantages and disadvantages to both; however, going about it the wrong way with either one will result in overpaying thousands of dollars. So which is better when refinancing your home, a mortgage bank or broker? Here are my best mortgage refinancing tips to help you avoid paying too much for your next home loan.

Mortgage Bank or Broker When Refinancing?

Refinancing your home should be cut and dry. Play a flat fee, get a great rate, mortgage refinancing done, right? Unfortunately, loan originators, mortgage companies, and banks are greedy bastards, caring only about their bottom line and they could care less about yours. Think I’m being too harsh? Read up on the Bank of America’s acquisition of Countrywide Mortgage and about their chunk of the government’s bail-out money and you’ll see what I mean. Anyone who tells you otherwise is just selling another overpriced mortgage loan. Sad but true… So, how to get the best loan when refinancing your home? Most homeowners think shopping for a mortgage by comparing rates and fees will get them the best deal…if you do this when refinancing you’ll end up with the best of the worst loans out there just like your neighbors did when they refinanced.

Mortgage shopping isn’t about comparing dozens of loan offers and fees until you can’t see straight. If you want the best mortgage you need to find the right person to arrange your next home loan. Who is this “right person,” a mortgage bank or broker? Keep reading and you’ll find out how to find the best person to arrange your next home loan.

Mortgage Banks & Broker Banks

Refinancing with a mortgage bank loan is a fast and convenient way of mortgage refinancing. What could be easier than automatically transferring your mortgage payment from your checking account every month? The problem with banks is that your bank plays by their own rulebook…which is to say they don’t play by the same rules as other mortgage lenders and they don’t play fair. The reason for this is that the banking lobby spent millions of dollars to have legislation changed to exclude them from certain “key” disclosure laws. Mortgage brokers on the other hand don’t have a lobby with deep pockets and don’t enjoy the same loopholes as banks, putting a plus in the mortgage broker score column for homeowners.

What is this disclosure law I’m talking about? It’s called the Real Estate Settlement Procedures Act and the reason it’s so important is because it requires mortgage brokers to disclose the fee your lender is paying them for marking up your mortgage rate. Once you understand how to recognize this commission based markup of your mortgage rate you can avoid it and lower your monthly payment by as much as several hundred dollars. Banks on the hand play by different rules. Unlike your mortgage broker who resells loans from wholesale lenders, banks fund their loans with the bank’s money. Therefore they set their own mortgage rates and aren’t required to tell you the profit margin on their loan. All your get from your bank is an Annual Percentage Rate (APR) based on low-balled fees and no idea what mortgage rate you could have had refinancing with a wholesale lender.

What about mortgage broker banks? When the laws changed a group of enterprising mortgage brokers wanted in on the same action enjoyed by banks. These brokers formed mortgage bank institutions that fund loans with their own money and therefore enjoy the same loophole in the Real Estate Settlement Procedures Act as your bank. You might think you’re dealing with a mortgage broker, they might even tell you that you are; however, if they close the loan in their company’s name instead of the wholesale lender then they’re funding your loan themselves and are doing business as a broker bank. There’s only one reason to do business this way; that reason is to take advantage of people and charge whatever they like…if you want the best deal for your next home loan you’ll need to avoid mortgage banks and broker banks at all costs.

Mortgage Broker Refinancing

Don’t get me wrong, mortgage brokers aren’t saints either…they want the same thing your bank wants, which is as much of your money as possible. How do mortgage brokers do this? They do it by marking up your mortgage rate for a commission from the wholesale lender known as Yield Spread Premium and by charging you as many junk fees as possible. How do you avoid this unnecessary markup of your mortgage rate and junk fees you ask? You do it by finding the “right” mortgage broker. Before you can find the right mortgage broker to refinance your home I need to go over how mortgage brokers are paid in more detail.

Mortgage Broker Compensation

If you refinance your home loan with a mortgage broker you could be charged a number of fees for loan origination. These fees include the origination fee, processing fee, courier fee, rate lock fee, and loan underwriting fees. These fees are in addition to any Yield Spread Premium your mortgage broker receives for marking up your mortgage rate. Loan origination fees are paid directly to the mortgage broker for their part in arranging your mortgage. A reasonable amount to pay your mortgage broker is one percent of your loan amount. Not all mortgage brokers charge processing fees; however if they use a third party processor to print out their documents the fee for this should not be more than $400…which seems like A LOT just for making copies. Ever hear of a mortgage rate lock fee? They’re like unicorns, they don’t exist. If your mortgage broker shows you a one-horned goat and calls it a unicorn are you going to pay a rate lock fee? Mortgage rate lock fees, like broker courier fees are pure garbage and if your broker charges you these fees you should find someone else to arrange your home loan.

How to Avoid Mortgage Rate Markup

Yield Spread Premium is the fee your mortgage broker gets paid by the lender for marking up your mortgage rate. This unnecessary markup of your mortgage rate can drive your payment up as much as several hundred dollars per much which adds up to thousands of dollars you’re throwing away in just a few short years. For every .25 percent your mortgage broker overcharges you they receive a kickback from the lender of one percent of your loan amount. Many brokers take as much as three points in Yield Spread Premium on top of the origination fees they’re charging for ripping people off. Mortgage lenders pay this extra kickback because home loans with higher than market interest rates bring them a premium profit when the loans are sold to investors on the secondary market.

You Can Avoid Yield Spread Premium

The good news for you today is this hidden markup of your mortgage rate that adds hundreds of dollars to your payment unnecessarily can be avoided. You don’t even have to be a financial guru to pull this off, find the right mortgage broker and you can pay a one percent origination fee without Yield Spread Premium and walk away with a wholesale mortgage AND pay half of what your neighbors paid at closing. How can you accomplish this feat of financial wizardry you ask? Check out my free underground mortgage videos and you’ll find out how to do it for yourself in six easy to follow steps.

Click Here For More Details…

You can learn more about paying less for your next home loan by checking out my free Underground Mortgage Videos.

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Here’s a quick sample to help you pay less at closing for current mortgage rates…