Hey guys, forgive me because I didn’t search too much in advance. I’m at work and browsed as much as I could on my lunch break but to no avail…
I’m buying a Fannie Mae Homepath house and getting the Homepath renovation mortgage. This will be my primary residence so I’m purchasing with 5% down. The renovation loan is for 23K. I am now only 16 days from settlement and my mortgage guy calls saying I now need a Renovation Specialist Consultant to come out and - consult- for a 600$ fee.
I understand why this step may be required, but after talking to the guy and understanding the service provided, 600$ sounds extremely high.
1. Is this service required on all renovation loans over a certain dollar amount?
2. Shouldn't my mortgage specialist have told me about this LONG ago?
3. Is $600 a fair price for this service?
Thanks in advance guys!
Never heard of such a position. Sounds like BS.
The HomePath Renovation lending process is:
Loan Processing Phase
1. Borrower selects property, lender, and contractor.
2. Lender pre-qualifies borrower, ensures that property is eligible, and approves contractor.
3. Borrower submits contractor's plans to lender.
4. Appraiser reviews plans and determines as-completed value.
5. Lender calculates maximum renovation amount and maximum mortgage amount.
6. Lender underwrites loan and the loan closes.
1. Lender establishes escrow for renovation
2. Contractor completes work.
3. Lender inspects to confirm work is completed
4. Lender disburses renovation funds in escrow to contractor
5. Upon completion, lender performs the final inspection, obtains title insurance endorsements and reconciles and closes escrow.
Underwriting would not need a Renovation Specialist if they approved the contract, that is sort of the contractor's job. Underwriting has a actuary table to use to underwrite costs and fees and will only lend on what they feel is proper.
That I know of, the only two folks who would have affinity over such matters is a licensed residential property appraiser and the certified Fannie Mae underwriter.
So, personally, I would pay or agree to this specialist at all. I would also now be concerned about the loan in general and perhaps call and talk to his boss about the whole thing.
@Drew Farnese a HomePath Renovation loan does not require a feasibility study or a HUD consultant, like some other programs.
And if the lender requires this (as an overlay) but did not disclose it on the original GFE within 3 business days of triggering RESPA, there will be a cure tolerance and the lender will end up having to pay for it.
Thanks for the responses guys! I'm gonna dig deeper, I'll post when I get somewhere with this.
I called and questioned my mortgage specialist on this matter, and he immediately got defensive and told me he doesn't want to "debate" about it and threatened that I'm going to delay my settlement if I don't just dish out the money.
I told him I wanted some documentation on the consulting process - which he IS saying is a homepath guideline. He sent me an email (which apparently I'm not legally aloud to copy and show you guys) that pretty much was from Diane (???) Saying I need to pay a 600 consulting fee to an "independent HUD consultant".
Should I try to throw it at him that it wasn't included in the GFE?
Just call his manager. If they require this third-party service (Definitely NOT a HomePath requirement) it should have been disclosed upfront.
Curious how this played out for you.
I would have called HUD and I would freely send them that email.
@Dion DePaoli @Michael Smith Hey guys, I meant to update! The whole thing turned out to be a nightmare. I can't thank you guys enough because I may have been HAD if it wasn't for your insight. To be honest, I'm still not certain what this guy's plan was...
To try to keep a long story short - I sent the Mortgage specialist an email stating all my concerns and questioning the credibility of the email he forwarded me from a random person who didn't even seem to be affiliated with the bank. Like I said, the email was from someone named Diane, no email address attached, and ALL that it said was "The loan subscriber needs to pay a $600 consulting fee." I can't stress enough how diplomatic and non accusatory I was in this email. I simply explained that I wanted proper documentation showing that this is a standard procedure, and I was nervous about where my money was going.
Somewhere in that email I said "You'd sure as hell want to know where your money is going too." This is apparently what stirred the pot. I found out why later on, but he got mad because since the word "hell" was in it the email was flagged and was seen by HR, revealing what he was doing to me.
My real estate agent is a buddy of mine, and the mortgage guy didn't know this apparently, because he called my agent and BASHED me to no end. Apparently I'm a no good, A--hole kid who doesn't know what the f--k I'm talking about and I should never have even questioned where my money was going. I could elaborate on that for a while, but we'll stop there :)
After all this happened, I called the sellers agent and explained the situation and asked him what the heck I should do. He put me in contact with Flagstar, who he said he usually deals with. I got hooked up with a loan officer that confirmed that the previous guy was shady at best. Even being 2 weeks from settlement he was confident he could get everything pushed through and still settle on time. (settlement is this Thursday 7/10)
He got me over my GFE and everything looked great. Their origination charge was HALF of the previous, and everything was explained clearly and adequately. I couldn't have been more pleased. 3 days out and we're not certain that it'll be on time, but thats OK. I'm glad to be with a reputable lender.
When I called to explain to the previous lender why I switched, I was professional and didn't get deep into it with him. I said I found a new company with a lower interest rate and origination charge. I DID tell him that the consulting was not standard and that is why I looked elsewhere.
All I could figure is he was trying to push through the loan as a 203k instead of Homepath Renovation, and was being dishonest with me. I don't know how he would have pulled that off, but it's water under the bridge at this point.
He called my agent directly after, and bashed me again. Oh well.
Lesson of the story? Don't ever ask questions because it makes you an A-Hole....apparently.
Thanks so much guys, you likely saved me from being schemed out of a couple hundred bucks at minimum. Maybe even PMI if I had gone along without asking questions...
WOW....do the world a favor when you get around to it and report that Loan Officer and company to CFPB. That sort of activity is what gives good and honest loan officers a bad name. That guy needs to loose his license and his company should be reviewed for having an operation that could allow such things. Report them.
Glad you made it out OK. Flagstar is a good bank.
Definitely glad you made the switch, looks like that LO didn't know what the heck he was doing.
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