Premier Nationwide Lending » Credit Report Fees http://rob-spring.com Premier Nationwide Lending Wed, 05 May 2010 18:38:15 +0000 http://wordpress.org/?v=2.9.2 en hourly 1 Why do you charge for credit reports up-front? http://rob-spring.com/why-do-you-charge-for-credit-reports-up-front http://rob-spring.com/why-do-you-charge-for-credit-reports-up-front#comments Wed, 23 Dec 2009 18:53:44 +0000 Rob Spring http://swf-mortgage101.com/?p=497 Simply put:  I don’t want the qualified/closed borrower’s to have to pay for the credit reports of the unqualified or not closed borrowers.

A Credit Report is required for a mortgage and has costs associated with it.  Some lenders disclose the cost, other’s don’t – never the less it is a cost of doing business.  I require potential borrowers to pay for their own report.  They don’t pay me, they actually pay the credit vendor directly.  I’m not padding the cost of the report to cover other expenses.  It’s actually the exact cost of the report.  The borrower even gets to keep a copy of the report for their records.  It’s actually available immediately after payment via a secure website link.  There the borrower can view/print/save the report for their records.

Now to the benefits for the borrower by investing the small cost of the credit report:

1. Lower total loan costs (your not covering added expenses for other people’s credit reports)

2. Reduced interest rates (lower overall overhead allows us to charge less per loan – a direct benefit passed on to you)

3. An actual hard or soft copy of a REAL Tri-Merged Credit Report with actual REAL SCORES – to use when comparing other lenders.

4. Access to the latest in Credit Optimization Software at no additional cost (For those that need a little tweak to get the best pricing or to just qualify)

The cost of a credit report for an individual is approximately $15. 

The cost of a credit report for a married couple is approximately $22.

 

Now to the reasons why you may not want to pay for your credit report up-front:

1. You don’t have the money (Probably shouldn’t be applying for a Mortgage then)

2. The other lender you called didn’t require it. (See above)

3. You already know your scores. (There is far more to qualifying and picking a Mortgage than credit score)

Below you’ll find an excerpt from an email chain with a borrower who decided to use another lender because they didn’t want to pay for the credit report.  This is a rarity but certainly has happened before and will happen again.  But I think some of the points made are good enough to publish here.

 Email 1: The Objection

—–Original Message—–
From: C M 
Sent: 12/17/2009 9:28:33 PM
To: Rob Spring
Subject: Re: Mortgage Info From Rob Spring
Rob, 

I just got off of the phone with “M”e about the fee for the credit report.  Like I told you, it was odd since we have never come across having to pay to have our credit report pulled.  You said that you could assure me that our closing costs will be lower than other brokers.  We’d like to proceed with you, since Brent recommends you, but considering that you have never seen our credit, how do you plan on maintaining this assurance?  We’re not trying to question your authority, we just want to make sure we understand everything clearly.

Email 2: Same Objection

Date: Thu, 17 Dec 2009 19:26:22 -0600

Subject: Re: Mortgage Info From Rob Spring

From: CM
To: Rob Spring 

Rob,

 We realize everything is relative to qualifying.  But before we spend $22 on something that no one else has charged us for and everyone has given us, what makes you all so different.  Why is your overhead so low?  Brent should’ve given you some basic info about us and the house in question. Based upon that info, and our credit scores around 680, what would you estimate your fees will be and what would you estimate closing numbers would look like. Bottom line.

 Thank you, 

 M & C

Email 3: My reasoning for not offering a quote and a “free” credit report

On Fri, Dec 18, 2009 at 11:26 AM, Rob Spring <swf-863@live.com> wrote:

My rate for VA with 660 or higher credit is 4.75% this morning
Total fees are going to be property specific and can be paid by the seller or traded for a slightly higher rate.  The fees I can control are the following:
 
Origination: 1%
Processing: $450 (paid directly to my contract processor)
Mtg. Broker: $350
Underwriting & Admin: $695
 
——————————————————————————————————————————————–
 
Now that that is done.  Let me explain why it’s like pulling teeth to get me to do it.  My job is to put together a plan for you based on your needs, objectives and overall financial goals.  A mortgage is not something you should buy off the shelf.  I minor mistake can cost you thousands.
 
The lowest rate is not always the answer.
 
The lowest costs are not always the answer.
 
In a perfect world you’d get both, but that’s not how it works.  Think of Costs and Rates as sides of the “Scales of Justice” – if one goes up the other goes down.
 
We need to know more about what you think will happen in the next few years, how long you plan to stay, how much you can afford to contribute to the transaction, what payment threshold are you paying now – what is your payment target for the new home….and the list goes on and on.
 
It’s going to be your house and your payment - I want you to understand what your choices are and decide what is best for you and your family.  I can’t give you those choices without having the information we’ve discussed.  Picking the type of loan is just the first step, there is much more to making one of the biggest financial decisions of your life.
 
I hope this helps.
 
ROB

Email 4: They are going to purse other options

From:Courtney Morse [mailto:comorse1217@gmail.com]
Sent: Monday, December 21, 2009 9:59 AM
To: Rob Spring
Cc: Brent Jones

Subject: Re: Mortgage Info From Rob Spring 

Rob, 

My husband and I talked about the financing situation over the weekend and have decided to use our other options.  Thank you very much for your time and best of luck in the future.

M & C M

Email 5: I’d never press someone into doing something they don’t want to do

On Mon, Dec 21, 2009 at 10:08 AM, Rob Spring <rspring@southwestfunding.com> wrote:
No worries.  I hope it all works out for you and your family.  Brent is a very knowledgeable agent and will take good care of you. 
 If for some reason you have questions, don’t hesitate to ask.
 Also I’d like permission to post our email chain on my website, as a FAQ blog post – I’d change or abbreviate your names and remove the email addresses of course.
 
 ROB
 
—————————————————————————————————————————————————————————————————- 
We did receive permission to post this on our blog and wanted to thank CM and MM for allowing it.
I know this post is long and if you’ve gotten this far, thank you for reading.  It is not my intention to criticise the decision CM and MM made but merly give an example of someone that decided to use another lender because of my up-front policy.
 
I understand that I may have lost business because of the policy, but firmly believe that it is best for my clients.  Being open and up-front with fees and charges is the only way I my heart will let me do business.  Part of putting together the “Mortgage Plan” is gathering all the pieces of the puzzle. 
Thanks,
 
ROB
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