How Do You Know Whether You Got a Fair Deal On Your Mortgage?

 I've seen a lot of shady stuff go on in the mortgage business, but one prospect in particular really stood out.  He was a nice guy, going through a divorce, and refinancing to get cash out to get on with his life.  He was very honest with me and told me that he was shopping around.  I told him that I'd give him the most fair deal I could right up front and if someone else offered him a better deal, I'd be happy to review their offer to make sure it was better than what I could do.  Sure enough, another broker offered him a loan and he was beating me by 1/10^th of a point.  This was a $200,000 loan and 1/10^th of a point comes to $8.39/month difference in the payment.  I asked him to fax me the Good Faith Estimate from the other broker so I could compare the fees.  He asked "What's that?".  Well, it's required by law to be sent to a borrower within 3 days of the application but, I gave the other guy the benefit of the doubt.  Maybe our borrower just missed it in the mail.  I told him to go ahead and close the other loan but to get me the Settlement Statement within his 3-day rescission period and I would show him how the other guy beat me.  He could then rescind the loan and go with me.  I didn't hear from him until about two months later.  He said "I finally closed on that loan.  What's your fax number?"  He faxed over the settlement statement and "Oh My God!".  The other broker had charged him a total of $9,000 to do the loan.  My total fees were $2,000.  So, at $8.39/month, what is the break-even point on $7,000?  It's sixty-nine and a half years!  If there is one silver lining to the current economic crisis, it's that these jerks who do five or six loans a year and rip people's heads off via ridiculous fees will be looking for another line of work in a diminishing pool of jobs.

So, how do you know you got a good deal?  I just met someone who has started "Loanzen — the community-driven mortgage information site".  I think it's a great resource because your getting your questions answered by people whose sole motivation is transparency in the mortgage business.