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1. Be careful how much weight you give to the Good Faith Estimate and making a loan decision based on the “best” GFE that has been provided to you by mulitple lenders. A GFE is simply that – an estimate (aka “guess”) of what your final settlement charges may be. It is by no means a written offer of credit or guarantee of those fees. While the lender is required to provide a second GFE if the loan terms change significantly, they are not bound to honor any of the terms quoted to you in your initial Good Faith Estimate. The reason for this is because the nature of mortgage lending means that it is impossible to guarantee or quote with 100% accuracy the exact rate and fees of any mortgage loan (even “locked” loans) until that loan has been completely processed, underwritten, and approved. The beginning stages of any loan process and the initial information you are provided about any mortgage loan is always going to be based off HUGE assumptions that may or may not be correct. This is especially true in today’s marketplace. These days, its nearly impossible to predict what a particular home is going to appraise for (the most important aspect of any loan proposal) and loan products, guidelines, and interest rates are changing daily – sometimes hourly. The extreme instability in housing and mortgage markets right now makes it almost impossible for even well-intentioned and honest lenders and brokers to quote with any amount of certainity what your final loan terms and settlement charges are likely to be 30 days from now.

2. Be careful entering a race to the bottom regarding loan fees. The loan with the fewest fees or the lowest fees is not automatically the best. The term “junk fees” is subjective. Every single fee charged in any mortgage transaction could be classified as “junk” in one way or another. When you’re the one paying them, all the fees seem like junk fees. What’s important is to take the total cost of the loan (all fees combined) and compare it to the total benefit (all benefits combined) and, like anything, determine if the cost outweighs the benefit. Very rarely will 3 different Loan Officers working at 3 different companies structure the same indentical loan proposal for you. The cost vs. benefit of each should be judged on its individual merits.

3. Be extremely cautious with “Credit Repair” companies and people claiming they can fix your credit (i.e. remove collections, bankruptcies, judgements, etc.). In almost all cases, “credit repair” involves disputing legitmate debts and other information contained within your credit report. People who practice credit repair rely on a consumer protection law that forces creditors to prove the legitmacy of a negative item on your credit report within a certain timeframe or they are forced to remove it. All credit repair involves the practice of disputing every single negative item on your credit report and counting on the fact that the creditor will not produce the proof of the debt or negative pay history of the debt within the specificed timeframe and therefore be forced to remove it. The vast majority of negative items reporting on anyone’s credit report are going to be legitmate debts. Therefore, the practice of credit repair involves disputing (claiming the debt isn’t yours, or that you were never late on it, etc.) debts that are perfectly legimate and correct. This is called fraud and its illegal. Disputing a debt you know to be valid, or allowing someone to dispute it on your behalf is not only illegal, its unethical and dishonest.

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I’m currently shopping for a mortgage and was *almost* roped in by several of the tactics Carolyn outlined in her book. My husband and I started our house buying process with the intent to use the builder’s financial mortgage services. We got pre-approved using my ss#, income and asset info which was a fairly straightforward process. The builder threw in a 12,500k lot discount and offered us $1,500 credit on closing costs. Our mortgage consultant spent a great deal of time going through various options and even talked about interest rates (6 months outside of the close date). At the time I had no idea what I was doing and so I trusted her to provide me with all of the information I needed to make a decision.

Fast forward to five weeks ago (today is 8/20).

My mortgage consultant essentially faded away. She didn’t return calls. She didn’t respond to requests for GFEs (if you don’t know what that is, buy this book), but finally did after the forth request. Although Carolyn suggests that you shouldn’t ‘shop’ mortgages, I did after reading the ‘secrets’ and changed my whole approach to the process.

First, my builder’s mortgage lender considered us a slam dunk. We were locked into using them otherwise we’d lose our discounts. After reading the book, I decided to call two other brokers one of who responded with 4 GFEs within 45 minutes. I made it easy for him to get them for me because I outlined all of the information Carolyn stated that he needs to generate these. In addition, I asked him point blank the questions that SO MANY people fail to ask!! I’m not going to give you the list because it’s in the book (if I quit my job to write a book about the secrets, I wouldn’t want someone spilling the beans)!

I asked about some of the fees and here’s how he responded:

App & Commitment Fees: With my stellar credit and all of my paperwork ready to go, I promise it will be a very clean loan. “The commitment fee is the only charge from the lender. It is to cover their cost of doing business. I have no leeway in reducing or waiving that fee. As a broker, every lender we have use will have a similar fee. As for the application fee, this is our only fee and I can look into reducing it but I can’t waive it completely.”

Attorney Courier Fees/Copy/Fax/Email Fee: Again, I’ll have all of my paperwork to you early August for a September 12th close date. “Just based on our conversations I can believe that this loan will be very clean and painless for both parties. You are a much more educated borrower than we normally see. The fees that the attorney charges for your closing that is shown on the GFE are an estimate that should cover most attorneys no matter where they are. If you have an attorney that you want to use (and it is your choice) that will negotiate their fees, please let us know. Again this is a third party fee that I cannot negotiate or reduce, whatever they charge is passed along to you with no mark up on our end.”

I was amazed when he said, “Your much more educated borrower than we normally see.” All of my questions and comments to him came from understanding these dirty little mortgage secrets.

To make a long story short: this book gives you all of the information you need in order to make an educated decision about one of the most important decisions in your life.

The builder’s mortgage lender’s closing costs are $11635.00 and the new broker’s are $6,800.00 and he disclosed every fee and commission (whereas the builder’s lender would not). The builder’s lender charges a higher rate than the new broker even though I have stellar credit. The builder’s lender didn’t even try to find a competitive rate for us because they *knew* the discounts would keep us hooked.

My personal mortgage tip for the day: when you see these types of discounts continue to do your homework!! Do not be fooled and by all means, don’t sign something saying you’ll lose them if you use someone else (like we did).

In the end, we were able to finally negotiate the discount and closing fees using another lender. Had I not purchased and read this book, we would have paid a lot more for our mortgage.

buy today….

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I am someone who had to learn the hard way about real estate. I looked to buy my first house in areas that had goldmine rushes in appreciation, like Princeton, NJ, Kapaa, HI and finally settled on Portland, OR–one of the most competitive markets in real estate history (last year, prices raised 150 grand in 3 months, and the bubble still has not burst.)

I was in contract multiple times, but since the houses I liked were old, they were plagued with foundation issues, dry rot, water damage…I was so used to bad inspections and dropping properties, I almost fell out of my seat when a perfect, 6 bedroom, Victorian, commercial space had an excellent report.

I was so focused on the front end of my deals, negotiating into contract, I had neglected studying the loan process.

When the sellers to my dream house learned they had backup offers close to 100 grand more than I paid, they did everything they could to throw my deal and restrict my timetable to get a loan. They asked for a week long extension on my inspection period, pretending they would repair misc. small items and then returned saying not only did they not call in contractors, they would not grant me an extension on the close date and practically cackled in my face,”Have fun getting a loan!” I had 2 weeks.

I read 4 books on mortgages, but still felt unprepared. Then, by sheer luck, I found Carolyn Warren’s, Mortgage Rip-Offs and Money Savers and it saved my entire deal.

This book is THE most informative, concise, entertaining book you will ever read on mortgages. It is an absolute crash-course, packed with minute details on the dirty, ugly, greedy world of mortgages.

She tells you how to find a loan in one day, what to say to the lenders, how to cut out their sales pitch and get facts, and she warns you about scams –and trust me, even the most reputable companies, will try to deceive you.

I ended up frustrating so many lenders because I would catch them at every turn. Warren’s book gives you the power to anticipate the games these companies will play with your time, money and future investment. I had no idea how loan officers can be worse than car salespeople and they are relentless.

What will they do to you? Lie, lie and lie some more. They will pretend they cannot get you Good Faith Estimates or Truth-in-Lending forms without running your credit or taking an application fee (never pay this!), they will say their “computers are down” and want to run numbers verbally (thus, it is not binding), they will quote good deals and then act like they made a mistake-more bait and switch, they will not tell you what the wholesale price of their loan is and how much they over-charged you, they throw in junk fees…but even when you think you have it nailed in writing, they can surprise you at the closing table–especially, if they know you are pressed for time and love the house–they will try to change terms or slip in new charges, and conveniently be “unavailable” to correct blatant errors, in your final moments.

In addition to her book, Carolyn Warren runs a website where you can email her questions. She answers within a day and will even look over your Good Faith Estimates and Truth-in-Lending forms. She claims she will save you twice as much money in your closing costs then she charges you, or else your consultation is free.

I was so terrified of losing this deal and expressed my desperation in an email, Carolyn even took the time to call me and give me additional advice.

I am not sure if she does this for everyone, my situation was pretty extreme…so, I hope my stating this will not result in overwhelming requests for a phone call from her…but I feel I should include this in my review because she was incredibly kind and she armed me with the knowledge I needed to protect myself. (Thank you, Carolyn!)

And here are some extra pieces of advice, from me. When you look for a mortgage broker, google “Upfront Mortgage Brokers.” They have a website, with state directories of lenders and brokers. You can read about their philosophies on the website. They will not hassle you about getting Good Faith Estimates or Truth-in-Lending forms…(at least they won’t pretend their “computers cannot generate these” without paying a fee–as Countrywide tried to scam me.) But do NOT let your guard down. Follow Carolyn’s advice, watch the junk fees, use her service–if you want an extra pair of eyes to catch something on the forms. Even the “Upfront Mortgage Brokers” will mess with you. Be Vigilant.

Finally, when you notice a Realtor or Mortgage agent is making “mistakes”–but then is suddenly out of the office or town, not taking your calls? Always get their cell numbers before your time line crunch hits and try dialing *67 before their number. This blocks your number from registering on their Caller ID. Most likely you will nab them, because they won’t want to miss important phone calls from other potential suckers–oops, I mean clients–and you can demand time-sensitive documents be handled/fixed and not ignored.

I wish all of you luck and happiness in finding a home. And I promise you, buying Mortgage Rip-Offs and Money Savers, by Carolyn Warren, will be one of the best bargains you will ever find. I gave this book, as a gift to several friends and they are like me–they cannot shut up about how great this book is! No joke.

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This very informative “how-to” book presents the pros and cons of working as an independent mortgage broker versus working for a large mortgage brokerage firm, or a smaller firm. And many other topics of interest are covered: Building business, sales techniques, locating borrowers, finding the best deals for clients, putting together a loan package, how to set up your own company, insurance needs, tips for success, state-by-state licensing requirements, and many more.

Hats off to Patricia Hughes, who has done a wonderful job of laying out all this information in a very clear and concise way. She has explained very simply and comprehensibly what would be needed to embark on a career such as mortgage broking, or to improve the skills of an existing broker.

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The mortgage broker sits between lenders and borrowers to facilitate successful matches that permit purchases of private and commercial real estate. Especially as one anticipates tight credit conditions and a new mortgage climate that promises difficulty for most borrowers, at least for some time, the skilled mortgage broker becomes an especially valuable person in the real estate world. For a personable, responsible, well-educated, entrepreneurial individual with the ambition to create his/her own successful business, this field may prove just right. Patricia Hughes presents a comprehensive, well-written, careful picture of the entire profession, including every element a newcomer to the field needs to consider to promote success. There are sections about contacts, software, certification (including a state-by-state appendix of regulatory rules), education, advantages of starting out as an employee of an established larger mortgage brokerage (they will educate you and prepare you to go out on your own), and even a list of equipment needed for a functioning home office. For anyone looking to become a mortgage broker this book would be an invaluable reference.

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In Patricia Hughes’ book, The Complete Guide to Becoming a Successful Mortgage Broker: Inside Secrets You Need to Know, you are guided in a non-nonsense factual manner down the path toward becoming a mortgage broker. Not only does she spell out exactly what a mortgage broker does, but she also breaks down how to become one in a step by step manner.

Using this guide will not only put you on the path toward being gainfully employed, but it will also help set you up in a lasting career. We don’t want to just “have a job,” we want to create stability and a foundation to grow upon. While this business venture may not work out for everyone, it is certainly the key for those who have a background or interest in this type of work.

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If you want to become a mrotgage broker, this is the only book you’ll need to guide you through the process. Every profession should have such a thorough guidebook available.