Step carefully when you enter the mortgage market - the problems abound
Not everyone can get the VIP deal on a mortgage that Democratic senators Christopher Dodd, of Connecticut, and Kent Conrad, of North Dakota, allegedly received. They got below-market rates on Countrywide loans, according to recent testimony.
For the rest of us, the mortgage market remains troubled. Would-be homebuyers and refinancers are finding errors in loan documents and high, hidden closing costs.
Here’s an overview of what’s going on and some tips about how to protect yourself:
Furthermore, Congress will have to act to extend that $729,750 ceiling, or it will expire Dec. 31, leaving all loans over $417,000 without solid backing from Fannie or Freddie.
It has extended that limit before, so that is likely to happen again. Bottom line for people who live in very expensive areas? Expect to have to hunt further for a new loan, and expect it to take longer to sell your home.
Be on the lookout, in particular, for what Alayon calls “bad ‘good-faith’ estimates.’’ Lenders are required to offer good-faith estimates of all costs associated with the mortgage. But many lenders have low-balled these disclosures. When the borrower gets to the actual closing on the loan, and gets the final documents, the actual amounts are higher than on the estimating document. Don’t sign if that’s the case, she says. Hold up the process and demand to speak to a higher-up.
You do have recourse once you’ve signed the documents. If you feel like you’ve been overcharged, you can contact your state attorney general’s office and the Federal Trade Commission.
■ LendingTree (www.lendingtree.com/mortgage-loans/loan-coach). Its tool is called lookB4yoUlock.
Linda Stern is a freelance writer. 
