Are national banks shaking down loan applicants for mortgage estimates?

Steve Duin pens an interesting column today in The Oregonian, titled “There goes the neighborhood bank“. Essentially, he suggests that some (formerly) local neighborhood banks are shaking down loan applicants for non-refundable, mortgage “commitment” fees. In other words, they’re now charging a $500 – $750 upfront fee to provide a Good Faith Estimate.

Duin cites JP Morgan Chase (new owner of Washington Mutual) as dinging a banking customer $750 for quoting a refinance rate–one that ultimately wasn’t competitive with another lender’s offer. Refund? Tough luck, said Chase/WaMu.

Read the story here.

Recently, I’ve been pointing clients to local mortgage brokers and small, regional banks because I’d been hearing that some of the larger banks (Wells, BofA, etc.) were taking no less than 6 weeks to fund loans. But this loan commitment fee is a new one to me. Anyone else experiencing this?

May 11, 2009 · Filed Under Mortgages

Comments

3 Responses to “Are national banks shaking down loan applicants for mortgage estimates?”

  1. Corri Klebaum on May 11th, 2009 3:12 pm

    Ron,

    I have heard a few complaints of application fees and longer waits. No fees with this broker/banker at least until it’s time to order the appraisal. Since May 1 all conforming appraisals must be ordered by a third party with the new HVCC requirements. But a Good Faith Estimate cost nothing but the 20 minutes it takes to complete an application over the phone :) BTW do expect 30 days on purchases and 45 on refi’s.

  2. Texas Refi on May 13th, 2009 12:24 pm

    Last week I did a refinance phone application with Chase. Closing costs in GFE were way in excess of what they said over the phone, so I pulled out the next morning. They still charged my credit card $750, and so far have refused to refund.

  3. Cathi Pierce on May 14th, 2009 12:20 pm

    YEp, and Yep! Since Wa Mu made it’s change ChASE CHARGED A client of mine $500. for a GFE. When they asked me about it, I called the lender…….NOT backing down! Additionally, I am seeing SOME GFE coming in very affordably-and at closing, new fees are added! I demand a copy of the GFE and we go over it completely, questioning anything….one client pullled out of a deal (at the closing table), when his Points went from the typical 1% to 2.5%…..mortgage broker claimed it was “harder to put together that loan”.Just wish this economy would right itself, and things could begin to even out!

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