Home Loans and Support

Homeowners BEWARE of companies requesting an UPFRONT fee for help with a HARP Refinance

Discussion in 'HARP Mortgage Loan Program' started by Erik Sandstrom, Nov 19, 2012.

  1. Erik Sandstrom

    Erik Sandstrom Mortgage Expert - Call 1-800-779-4547

    I recently received a phone call from a potential client regarding a HARP Refinance who asked me a few questions to make sure the outfit he was contacted by is a legitimate service. He received a letter in the mail stating that he was qualified! After speaking with them they had requested an UPFRONT fee of $3900.00 to start his new refinance. Immediately he thought this doesn't seem right and reached out to me to find out.

    My immediate response was, ABSOLUTELY NOT - that's a red flag and you should run the other direction. Closing costs in most circumstances don't even exceed 3000.00, why would you pay an "Application Fee" of $3900.00 and ALSO closing costs. This makes absolutely no sense and I hope this organization is shut down for taking advantage of struggling homeowners.

    The first thing I did was CALL them to find out exactly what my client was speaking about. The representative on the phone was very rude and kept providing the terminology of "We offer a service" - So I continued to ask questions on what service they actually provide and why a borrower would need a "Service" to help them with HARP rather than a lender. She immediately changed her tone and said "These phone calls are being recorder sir" so I said "GREAT!!!!" -

    As the phone call progressed I said "Please stop preying on underwater borrowers and asking them for a $3000.00 up front fee" - Here's where the interesting part came, she said "I am NOT asking you for $3995.00 up front, have those words come out of my mouth" I repeated "Well that validates what my client told me, I said $3000.00 not 3995.00 so you obviously know what you're collecting from these borrowers up front" After that I was hung up on.


    Typically the only thing that would be charged to a borrower prior to funding the new loan would be an appraisal, in 90% of all cases an appraisal is NOT required as the automated underwriting system determines a value of the property.
  2. Evan Bedard

    Evan Bedard Call 1-800-779-4547 Loan Safe Mortgage

    Thanks for giving everyone a heads up on potential relief scams offering assistance under HARP. There are many scams out there who will prey on unknowing borrowers and you need to do your research before paying any company a dime for their assistance. You should not pay any upfront fees to obtain a companies service to help out with loan modification or refinance options.
  3. Tee-Dub

    Tee-Dub LoanSafe Member

    Erik, I'm being charged one percent, plus $1695 origination fee by a company you know very well, is this the norm? Puts us at $5,565 plus escrow and closing fees on top of that, for a total of $7,390 plus pre-paids.
  4. Tee-Dub

    Tee-Dub LoanSafe Member

    Don't get me wrong, I'm not sour, as a matter of fact I will be very happy if we get this approved. I just thought the 1% was generally the fee, not another $1695 gravy on top of that.
  5. Erik Sandstrom

    Erik Sandstrom Mortgage Expert - Call 1-800-779-4547

    Hey Tee-Dub,
    I'm referencing a company charging $3995.00 for a "Service" which I'm assuming puts you in touch with a lender that's participating in the HARP program. What you're speaking about is the origination charge, which is not an up front charge and just a quick question - What interest rate are you being offered?

    I only charge a $1495.00 origination rather than $1695.00 and no points. Each branch & state have closing costs structured differently.

    Thanks Evan,
    I want to make sure homeowners are aware they shouldn't be paying UP FRONT/Application fee's for HARP.
  6. Tee-Dub

    Tee-Dub LoanSafe Member

    We are locked at three point seven five percent. One percent plus $1695 for origination fees. Total fees on $387,000 $7390 not including pre-paid/impounds.
  7. Erik Sandstrom

    Erik Sandstrom Mortgage Expert - Call 1-800-779-4547

    Hey Tee-Dub,
    That sounds good to me, I wanted to make sure the interest rate was in the 3's.
  8. Tee-Dub

    Tee-Dub LoanSafe Member

    Keeping our fingers crossed all goes well. Greg's assistant Amber said she is submitting everything to your underwriting department tomorrow. So excited to hopefully get this done!

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