So we spend some time together. I get to know about you and your financial goals for your home and your family. I go to work to find a great mortgage solution for these goals. Meet up with you and present everything in black and white with closing cost guarantees. Then..........
Whoa you say! I saw on TV a ad for no closing cost and your charging me $$$!
So what do I do now? I learned a long time ago that it is much easier to write' em vs fight' em. UH?
Again I am going to present to all of my Indiana clients the best mortgage program for their needs. Now while we may get a little side tracked on little stuff like closing cost I am not going to let this stand in the way of getting you a great deal so I write' em. Another thing I learned is to "seek to understand." So first I will agree with the client. It goes something like this:
"You know what, your right! I have seen the same ads. In fact it sounded so good I had to check them out. My client, here is what I have found. For the most part two companies are advertising these programs, Bank of America and Countrywide. (In fact, Bank of America is in the process of buying Countrywide). So I went to their website's and this is what I have found:
Bank of America - Skip the Fees with No Fee Mortgage PLUS. Prequalify Online Today.
Wow! Sounds great. I am now thinking that I need to go work for them but before I submitted my application I saw one of those funny little asterisks things* Hum, I said. Maybe I better check this out. Here is what I found
The following is a summary of the Terms and Conditions. A complete copy will be provided to you prior to closing.
1. No Fee Mortgage PLUS Terms & Conditions
The following is a summary of the Terms and Conditions. A complete copy will be provided to you prior to closing.
No Closing Fees
For customers who qualify, Bank of America will waive or pay all fees for services or products required by Bank of America in order to grant credit to the customer for the purchase of a primary residence. Fees do not include (and the Bank will not pay for): (1) taxes (including, but not limited to property taxes, recording taxes, document stamp taxes, intangible taxes or other similar taxes); (2) interest, including but not limited to prepaid interest or discount points; (3) fees related to owning the home and not directly related to the granting of credit, including but not limited to property insurance (e.g., flood insurance and hazard insurance), homeowner's association fees, special assessments and other similar fees; or (4) fees for products or services voluntarily chosen by the customer. Closing fees and closing costs differ. This offer also does not address any fees you may incur after the closing of the loan, such as late-payment fees, mortgage release fees or other fees associated with the servicing of the loan. This offer does not apply to any traditional fees paid by the seller. This offer is available on applications for certain first mortgages from individuals to Bank of America taken after April 21, 2007, to purchase a 1-4 unit owner-occupied family residence or second home. You must be an existing Bank of America customer. This offer is available only to the real property securing the mortgage. Offer not available through independent mortgage brokers approved to sell Bank of America Mortgage products. Offer is non-transferable and subject to change without notice. Only one application per household. Some restrictions may apply. Credit and collateral are subject to approval. Terms and conditions apply.
Close-On-Time Service Guarantee
To qualify for the Close-On-Time Service Guarantee, you will need to provide us with all the documentation required by Bank of America in the time frames established by Bank of America. You must lock your rate seven calendar days before the scheduled closing date. There can be no significant changes in your loan after your initial application. Bank of America will not be responsible for delays caused by you or any third parties that you select. Eligible claims are for loans that do not close by your requested closing date or within 25 calendar days from the day of your completed application, including property address if submitting under the BuyerReady® loan option, is submitted. The latter of the two dates will be used to determine the eligibility of the claim. You will need to call 800.497.0072 within 30 calendar days of closing on your loan to submit a claim under this guarantee. The equivalent of your first month's mortgage payment is principal and interest only. Any escrows such as taxes and insurance are not included. Other restrictions may apply. This offer can be withdrawn for new applications at any time. Your mortgage application must be accepted by your Bank of America loan officer while this offer is in effect.
Best Value Guarantee
In order to qualify for the Best Value Guarantee, you must receive full credit approval for the first lien purchase money mortgage with Bank of America. To redeem the $250, you must close your purchase mortgage with another lender, then call 800.870.3206 where you will be prompted to complete a brief survey. You'll be required to fax a copy of your HUD-1 settlement statement from your closing. Your loan with the other lender must be secured by the same property as the property you identified in your Bank of America application. You must close on your purchase loan within 60 calendar days after Bank of America sent you notice of the approval of your Bank of America mortgage. You will receive your $250 check via U.S. mail within 30 calendar days of our receipt of your HUD statement. We may report to the IRS the value of any premium, and any applicable taxes are the responsibility of the recipient.
2. Savings calculations based on 2007 Bankrate Study.
3. Assumes 1% origination fee. All fees are not charged by all lenders.
4. Disclosed savings are based on a loan amount of $200,000 with a 30-year fixed term, a 6.856% APR, 0.311 points, 360 monthly payments of $1,297.20, principal and interest only, 120 monthly payments of $130.00 mortgage insurance in years 1-10 and $33.33 mortgage insurance payments until LTV drops below 78% at 30% coverage, and a 95% LTV (rate as of 4/13/2007). Your benefits may differ depending upon loan amount and term and selections under the No Fee Mortgage PLUS program.
5. HUD Numbers and titles are listed as used by Bank of America. Number may vary by lender. Fees paid by Bank of America are outlined by title description and not title number.
Important note about this calculator:
Savings calculations based on 2007 Bankrate Study. Assumes 1% origination fee. All fees are not charged by all lenders.
Bank of America, N.A. Member FDIC. Equal Housing Lender 
© 2007 Bank of America Corporation. All rights reserved.
That is a bunch of fine print and still do not know what it takes to qualify? So maybe that is not the right choice. I guess Countrywide will have the better deal. Lets see:
Countrywide -
No Closing Cost++ Home Refinance Loan.
Call Today to Combine Mortgage and Debt.
FED CUTS RATE!
CALL OUR SPECIAL RATE HOTLINE:
1-800-291-XXXX (if you need you can look up on your own. I can't let you walk in to this insane program)
On the surface it sounds good, right? Sure No Closing Cost! What about those little ++ hanging around. Yep, more fine print. Here it is:
^ Countrywide Home Loans is a division of Countrywide Bank, FSB -- a member of the Countrywide® family: America's #1 home loan lender (as ranked for 2007 by Inside Mortgage Finance, Jan. 25, 2008, ©2008)
* As announced on March 18, 2008 by the Federal Reserve Board, FOMC meeting minutes, decrease of 0.75% to the Federal Funds Rate.
++ Affects pricing. With the No Closing Cost Option, borrowers finance the closing costs instead of paying for them at closing. Borrowers who pay closing costs at closing may qualify for a lower interest rate. Some upfront fees (ex. credit report and appraisal) may apply and may be credited at closing. Call for details.
Not only is Countrywide charging you closing costs they are slapping you in the face and telling in the ad that it is no closing cost.
Folks, give your mortgage broker a break. If you have found a good one, congratulations. If not, call me. I will get you a mortgage for your needs and not my needs (read that again, it is the important one). While we all have to make money. That's how I provide for my family just in the same way you provide for your family we can do it with the best intentions of the client.
Thanks for reading my post and please comment. This issue seems to come up with most (and I use the term) customers. Heck I am also a customer with a mortgage and if a no closing cost was the right deal I would do it. It is not the right deal for most. As you see with "non-edited disclosures" when you get down to it even the "No-Cost" deals have cost.
At the end of the day it is advertising. Just like the car business, you advertise the "loss leader" that almost no one qualifies to get and sell what you have when they call or visit. No saying that I agree. Just saying what it is.
Let me know how I can help you get the best mortgage for your needs.
Respectfully
Tony Grego - Indiana Mortgage Company
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