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Refi Rant

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By 5walker
July 9, 2003

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We finally closed on our refi. I bring my calculator and have my best patient and trusting attitude. In about 5 minutes, I realized both were completely useless. There is something terribly backwards about this whole process. You would think that at closing you would have hard numbers to agree or disagree on. Some professional, businesslike approach. Nope, the shell game is still going on.

Appraisal: We had paid the broker $350, which was credited. The new GFE at closing says $400. Wasn't the charge supposed to be $350? No, "we don't know what the charge is till the appraiser sends in his bill and I guess it was $400." So our $350 was only a DEPOSIT, not prepayment-in-full as we thought. And this was for an appraisal that contained a $100k mistake that I had to do the work to resolve. I ask so what if they had sent you a $5000 invoice, would you have paid that? I get a tired little smile from the escrow officer that says I wish I could charge for these dumb questions. Ok ok where is the invoice that says they charged $400? "We don't have those here, that's what the broker told us." So I can't see any actual invoices? "No, afraid not".

Escrow $500. Okay, the broker's last GFE said $400. Was our refi extra-difficult for you? "Oh no, our standard charge with XYZ Broker has always been $500. Your broker should have known that." Apparently not.

Additional Escrow fee: $175. Don't we already have a $500 escrow charge, what's this? "Well that's for the escrow officer to notarize the thingy" How much per thingy? "oh about $10 each. But we didn't know how many she'd have to do" Well they're done NOW, right? let's count them--exactly one. Didn't you know WHEN YOU HANDED ME THE PACKAGE OF PAPERS there'd be only one thingy to notarize and just charge me the $10 instead of $175? "Well we never know for sure and don't worry you'll get back the extra $165 after closing".

Pad: $350. Of course, the "pad" is in case someone else throws in an unexpected charge. Again, I'm supposed to be comforted by "oh I'm sure we won't need it and you'll get it back after closing". The other thing that is heartening to see is that the broker has put "we shall not be at any expense in this transaction". Glad to see they have their priorities in order. Wish I'd thought of it. That statement, together with the pad, gave me warm fuzzies all over.

HELOC Paydown: The HELOC is overstated by a couple thousand dollars because I'd been making normal scheduled payments to it while waiting for closing. Apparently nobody bothers to recheck the balance say a week before closing to adjust the final payoff amount. So now I'm going to get a big refund check and a mortgage for $2000 more than needed to be.

HELOC Recording fees: After all my work to get my HELOC subordinated, the escrow officer still believes I should be charged recording and reconveyance fees of almost $100. I patiently explain again, we are paying the HELOC DOWN, not OFF, so there's nothing to record. To no avail, however. The onus is on me to have our HELOC officer fax these clarified instructions to the escrow officer, within the 3 day rescission window, otherwise they will charge the fees regardless.

So after realizing that the idea of a Final, Fixed "This Is It" Closing Costs Sheet is apparently a fantasy even at closing, and seeing that we're expected to sign all these papers anyway, based on the promise of a "final corrected accounting statement in two weeks" I ask my last dumb question of the escrow officer:

"Suppose Doofus at BestCon company remembers he didn't charge enough to sign his name or forgot to charge me for his pen and decides to stick in a $500 or $1000 charge for those important things in there, after my 3-day rescission period is over? Sure, I'm going to get this 'final accounting statement in two weeks' but by then, you've paid everybody and it's too late to question any of the charges, right?"

The escrow officer had that blank expression like that possibility had never occurred to her. She knits her brow, "Oh, that never happens".
Oh yes, we feel so much better now.


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