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CFPB cracks down on kickbacks

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Mortgage Professional America | 20 May 2013, 06:00 AM Agree 0
A “systemic problem” in homebuilding that’s been around for many years has reared its head, an industry spokesman has said
  • Marty Stroiman | | 21 May 2013, 09:09 AM Agree 0
    Since the passing of Dodd-Frank and lender comp, mortgage origination fees have pretty much gone away. Many builders in Southern California entice their buyers to use their builder owned mortgage company or J/V by offering to pay a 1% mortgage origination fee as part of their closing cost credit. The amount shown to the buyer as a credit is inflated and astounding as an additional 1% mortgage origination fee is not common in the marketplace.

    However if the buyer would obtain financing in the open market to finance their new home, the buyer would not be paying the non- esistent mortgage originaltion fee.

    Chances are the buyer would also be recieving a small legitimate lender credit to be used to pay a portion of their closing costs, and in most cases a lower interest rate.

    CFPB needs to put a stop to this fraudulent and misleading practice. I takes advantage the Ameican hombuyer and increases the cost of homeownership.
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