Investors, not Lenders, Are Behind This Charge

Robert J. Bruss’ answers in his Real Estate Q&A; column show his lack of knowledge or research and serve to perpetuate myths about mortgage lenders and the mortgage industry.

In the Feb. 14 column, Bruss stated that the quarter-point charge to a borrower for waiving impounds is “. . . another mortgage lender rip-off.”

The quarter-point charge for waiving impounds is, in fact, not charged by all lenders but is determined instead by the particular investor to whom that lender is selling the loan.

For example, conforming loans sold to Fannie Mae or Freddie Mac do not require the penalty for impound waiver.

However, investors such as GE, Citicorp and Norwest all require the quarter-point add-on, as do most jumbo investors.

On another occasion, Bruss said that some lenders would have their appraisers low-ball properties in order to be able to turn down the loans. This comment is not only wrong, it borders on asinine.

If a lender has reasons other than the appraisal for declining a loan, then the value is immaterial. If the credit aspects of the loan can be approved, then there is no reason any lender would want to decline it.

GREG GRANDCHAMP

Vice president

Retail production

First Mortgage Corp.

Diamond Bar