Borrower pays $2,000 for in-office closing?

Your refinance loan application has just been approved and your lender asks if you have a preference in selecting a title company. The borrower (name redacted) in the HUD-1 you see below answered "No" to this question and was taken for a ride – so to speak.Closing Doc

In fact, by allowing his lender to select the title company, this borrower paid $5,366.50 for title charges compared to $3,338.20 had he selected Federal Title as his title company. He overpaid by $2,028.30 simply by allowing his lender to select the title company.

This is a classic example of what routinely happens to borrowers when they defer the selection of service providers to their "trusted advisor."

In this case, TRG Settlement Services, LLP, is a national settlement service provider operating through multiple affiliations (i.e., kickback arrangements) with large national lenders. Because they share their profits with your lender, the lender has incentive to steer you to them.

By offering in-home or in-office closing services, the borrower is often persuaded to use the lender’s affiliated title company.

The question for this borrower: Was it worth over $2,000 to have a notary conduct the closing at your office? Is such convenience really worth such a price?

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