fee charged for payoff statement/ referred to atty
i have two questions:
1. on 2 short sales i am working on, they say when i call that "this loan has been referred to an attorney for processing". in this case, will loss mit still work with me? how does this being referred to an attorney affect me?
2. 2 lenders have wanted to charge me $25 for a payoff statement bc i am a "third party". does that seem right? and then they said it would take 5 to 7 business days to fax it to me. i went thru the menu and i think they will end up charging the homeowner the $25. dont want to be penny wise and pound foolish, but $25 seemed pretty steep for a payoff statement. and it happened at 2 banks.
thanks for anyone's help!
1) That's a standard message. Loss mitt may still deal with you or you may be instructed to get payoff letter from atty.
2) Never had a bank or law firm charge me for a payoff letter. Are you notifying them that you have a signed letter of authorization?
ibnj,
thx 4 ur resposne.
1. good.
2. yes, let them know, but they still say it is standard. happened twice. seems weird to me but maybe they'll just add it to the fees which will get short saled away anyway!
The payoff statement fee seems to be a more common practice these days. Just another way for the lender to get something without calling it a pre-payment penalty.
In my experience, the fee for the payoff letter is charged to the borrower. It does not make a lot of sense to charge the fee just because a "third party" is involved. Whenever you have a traditional closing with a mortgage loan payoff, a third party -- the settlement attorney -- has always been involved because the attorney has traditionally requested the payoff amount.
Remember a few years ago, real estate agencies started charging an administrative fee for closed sales contracts. Here again, real estate agencies did not start doing something, but instead starting charging an extra fee for something they had always done. Same thing with the loan companies. Just another way to improve their revenues.
Charging a fee for a payoff statement is quite unusual. When I was refinancing our home about 18 months ago, I requested the payoff statements from the different banks for several loans we had and they were either mailed or faxed to me without any fees, they were also mailed and faxed to the would be new lender without charging a fee. With the 1st would be new lender we didn't close (we were already at the closing table) because they didn't do it the way we had requested the refinancing and were charging us a big heap of "blue sky" money with which we didn't agree. We went through the whole thing again with the 2nd new lender where we closed to our satisfaction. Both times payoff statements were mailed and faxed and were not charged any fees.
I think that sometimes banks just charge and people pay. I would tell them that I am not going to pay any fees for that service, be assertive! and you'll see that that will pay off (forgive the pun!)
Ladybug
dave and ladybug,
thanks for your thoughts and advice.
i already got the $25 payoff statement that they said would take 7 to 10 days! anyway, guess it just got added to the homeowner's fees. go figure...thanks again. - sewa
Ladybug,
As I said, charging for the payoff statements seems to be a more common practice these days. Your experience is 18 months old, while I have only noticed this new practice in the last eight months when adjustable rate mortgages are involved, especially when a rate adjustment would occur just prior to the proposed payoff.
I admit that I have yet to see this fee applied when a fixed rate mortgage loan is being paid off.
Sewa-When banks tell me that they've referred the account to an outside attorney, I still want to deal with the bank. Their attorneys won't usually return calls because they want to make the $ that comes with finishing the foreclosure. If the bank tells me that I have to deal with their atty, I tell them that the atty will not call me back and I'm worried that we will run out of time. I usually can convince the bank to deal with me. As far as payoffs; most banks don't charge a fee for the order, but when they do, it gets added to the sellers payoff. Best of luck, Sharon