Author Topic: fee for loan modification  (Read 1447 times)

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dwvm

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fee for loan modification
« on: April 21, 2013 11:49:44 PM »
I have modified my loan but did not realize that homeward residential was going to charge me 10,000.00 to do it...is this common practice? Is there anything that can be done after the fact?
« Last Edit: April 21, 2013 11:54:16 PM by dwvm »

CleaningUp

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Re: fee for loan modification
« Reply #1 on: April 22, 2013 02:27:18 AM »
Closing costs?

Highly likely.  I am sure that the way that they look at it...and it is a sound argument...that the "loan modification" is, in actuality, a NEW mortgage.

But if it is a "new mortgage", you probably should have received a HUD-1 form explaining how the charges and proceeds are applied.

Check the RE laws in your state.  You might also want to take this up with the Consumer Finance Protection Board.

It may or may not be legal.



Bruno the JDB Killer

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Re: fee for loan modification
« Reply #2 on: June 24, 2013 08:24:43 PM »
If it was a new mortgage or a refi, you should have received a good faith estimate from the lender explaining all the costs that would be paid at closing. Not sending one is a RESPA violation. The lender is responsible. Failure to disclose is also a TILA violation and in most states an unfair trade practice.

Is this company the lender? If not, and they are acting as a broker, they should have given you a broker agreement to sign, explaining their fees and where those fees would come from. Mortgage originators / brokers  fall under the authority of the state banking commission.

Loan mods require a new note and a closing, but it shouldn't cost that much. Technically it is illegal to finance closing costs. They use the YSP (broker commission) to get around this, but you pay in the end through a higher interest rate.

The lender pays a YSP (Yield Spread Pemium) to the broker sufficient to cover all closing costs and fees. In return for which you agree to a slightly higher interest rate that allows them to recoup their money. All nice and legal. Most of the time.

I am not an attorney. Any information I post is strictly my opinion and should be treated as such.

gwheelock915

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Re: fee for loan modification
« Reply #3 on: July 02, 2013 10:38:56 PM »
Loan mods do not require a new note and closing. Ours required all of 2 signatures in front of a notary. MERS then signed for BoA. Getting BoA to accept the terms of the modification that they drew up is a different matter...

Homeward is part of Ocwen, and has drawn the ire of the feds. I would ask for a breakdown of fees. If this is related to hamp, no fees are allowed.

 

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