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Countrywide’s fable, not the Congressman’s

Posted: August 15, 2012 2:00 a.m.
Updated: August 15, 2012 2:00 a.m.

The facts are simple: There were no benefits given to Congressman Howard P. “Buck” McKeon, R-Santa Clarita by Countrywide when he refinanced his home. Mortgage professionals including me, as well as The Signal, determined that he was actually overcharged by Countrywide in both fees and rate.

It is Countrywide that has a credibility issue, not The Signal or McKeon.

The Signal met with the congressman and addressed these allegations personally. The Signal was given the documents that were given to the congressman by Countrywide in connection with the refinance for review.

The Signal interviewed two different mortgage brokers to further substantiate the findings.

The Signal did its homework and came to an informed conclusion based upon the evidence available and interviews it conducted. It would appear that the representations made in “Buck’s Countrywide Fable” are based on a limited review of the information that has been made available.

The issue Petzold has attempted to show is that there were no “junk fees aka garbage fees” based upon his review of the documents.

I am assuming that he carefully reviewed Page 2 of the Final HUD-1. On this page it itemizes the “Settlement Charges to the Borrower.”

These charges are entered on line item basis and numbered. It’s unclear if Petzold’s research uncovered that both the title and escrow companies were owned by Countrywide at the time of the refinance.

This important fact was missed in Petzold’s column, which affirms “the closing statement does reflect the payment of legitimate third party fees to the title and escrow company.”

This is the truth of the matter regarding preferential fees and pricing: It’s a math thing. Countrywide on some of its loans did charge a processing fee or “junk fee” of $490. Unfortunately, the column fails to address the actual fees that were charged McKeon.

The Landsafe Title fees found on the HUD-1 have the following: Line #1105 $20, Line #1108 $1,027.20 and Line # 1113 $50 for total of $1,097.20. There were two Title “junk fees” charged on Line #1105 “Document Preparation” and Line #1113 “Endorsement Charges.”

Those are only $70, one might argue, but they are in fact Title “junk fees” that were charged. The more obvious overcharge is Line #1108 “Title Insurance.” The fee of $605 should have been charged for Title Insurance on the refinance of $315,000. The McKeon’s were overcharged $422.20: $70 plus $422.20 equals $492.20.

It would appear to most that they did pay the “junk fees” in their Title fees. The $492.20 is more than the alleged “no garbage fees” consideration you represent.

The pricing of their loan was also researched. The facts are the rate they received was 6.75 percent. The week the loan was locked the published national average rate substantiated by independent resources was 6.49 percent.

In my professional opinion, I still do not see any evidence of preferential fees or rate for McKeon.

Chris Mendenhall is a licensed broker/banker with American Family Funding in the Santa Clarita Valley.


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