The news is out: Bankrate.com did a survey of 2013 Closing Costs and learned that in most states they have risen 6% over 2012 costs. Loan origination fees jumped the most – going up 8.4%.
Why? Is it really costing lenders more to close a loan, or is this opportunism at work?
For the most part, we believe it’s opportunism. With deflated home prices and mortgage interest rates at their lowest in decades, more people purchased homes and more homeowners decided to refinance. Lenders didn’t need to compete for customers because customers were in abundance. So they raised their rates, just because they could.
Lenders also know that as interest rates and home prices rise, fewer will buy and even fewer will refinance. Thus, they’ve decided to make as much as they can now. To quote an old saw: they’re “Making hay while the sun shines.”
Some lenders, however, are blaming the new government regulations. They say that the cost of compliance is enormous. They have to bring on more staff just to make sure that they don’t break any rules.
Our thought is that we’ve been given fair warning and plenty of time to learn the regulations. By 2014, every loan officer should know how to comply.
But perhaps that’s the crux of the problem. Banks and huge mortgage companies need a large staff of loan originators – and employees come and go. Many of their employees are not seasoned loan officers and don’t have the experience necessary to understand and comply with the new regulations. Thus, those companies must train others to oversee their work and keep them in compliance.
The new regulations don’t go into effect until 2014, but they’re starting months ahead of time in order to have their systems running smoothly before the deadlines. Meanwhile, they’re charging higher closing costs to offset the expense.
Here at Homewood Mortgage, LLC – the Mike Clover Group, we have a different attitude.
We don’t believe in charging extra “just because we can,” and we don’t need to hire compliance officers to oversee our work.
We prefer to earn a fair return on the work we do – and we prefer to become a client’s lender for the long term. We want our clients to feel confident that we’ll find them the best loan at the best price – whether it’s this year, or five years from now. We also want them to feel safe in sending their family and friends to us.
In addition… we’re seasoned home mortgage professionals who can read and understand the new regulations – and remain in compliance.
Call us – and see how little it can cost to close a loan on a home anywhere in Texas.