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Mortgage Q&A: Red flags on refi offer justified
Last week, I described a letter I had received from a mortgage company soliciting a refinance. The letter was full of fancy calligraphy, color and exclamation points. At the bottom was a "Funding Voucher" designed to look like a check. Needless to say, my column suggested this form of solicitation was unethical.
I decided to follow up with a phone call and get some information in the event this company did, indeed, have an attractive refinance program. Here's a recap of my conversation.
A live human being answered the phone and asked for my name and the state in which I lived. I was transferred to a fellow named Brian. I began the conversation by asking him how he had obtained the balances of my mortgage and credit card. He told me his company buys the data from Equifax, one of the nation's three credit repositories. When I asked if there was a way I could "opt out" and prevent Equifax from selling my data, he said he didn't know.
I then asked if he could give me a ballpark range of a rate and cost if I wanted to refinance to a 30-year fixed rate. He proceeded to explain, in detail, the escrow-collection procedure for real estate tax and insurance. I told him I understood the escrow process and was more interested in the transactional costs associated with the refinance. He told me his fee was "negotiable" and asked what fee I would like to be charged. I suggested he give me a rate with no fees. "Fine, no fees," he said.
He then asked the amount of my real estate taxes and insurance. I told him but reminded him that I understood the escrow process and was looking for a ballpark quote on a refinance with no fees. He told me he was pulling up the rates on the computer and it would take a minute or two.
Meanwhile, I asked him if this "no-fee" quote was all-inclusive. He told me it didn't include "title" and estimated my "title" charges would be about $5,000. I asked him if that included the appraisal cost and his answer was: "Nope. You're on your own with the appraisal."
He then said something like, "Henry, you sure are stuck on the costs. The costs are going to be what they are. There are always costs." I replied that I was merely trying to get an idea of what the 30-year rate might be and what those costs might add up to. He told me his Internet was down and he couldn't provide a current quote.
I asked him to give me yesterday's quote, assuming I have good credit and income. He told me he couldn't do that because the rates change all the time. I explained that I'm familiar with the mortgage market and know the rates did not move between yesterday and today. I assured him that I was not holding him to a quote but was merely trying to get an idea.
He told me that because my loan is a jumbo loan, the rates are likely to be more volatile. He said he would e-mail me a Good Faith Estimate. I agreed to that but told him I still would like a verbal ballpark figure. He refused.
I finally realized I was not going to get one piece of relevant information from this guy. I explained to him that I was, indeed, interested in a refinance but also was doing some research for a mortgage column. He replied, "Beautiful. I'll send you a Good Faith." Eventually, the deadline for this column arrived, but the Good Faith Estimate did not.
With competition like that, it's no wonder my business is booming.
Henry Savage is president of PMC Mortgage in Alexandria, Va. Send e-mail to firstname.lastname@example.org.
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