DiTech's Flat Fee Not As Flat As It Appears
| | Monday, March 21, 2005 @ 11:56 AM EST
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According to a recent article in Consumer Reports, DiTech's promise of a $395 flat fee is not as flat as it appears. When reviewing the finer print, multiple additional costs can be listed including the buyers' title insurance, lock-in fees and certifications.
Though the company's advertising swears that it offers consumers the best choice when negotiating a mortgage, further examination into the company's practices reveals hidden costs that could end up costing consumers more than if they used a traditional lender.
"Paying points is not
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necessarily bad. Each point you pay represents one percent of the total loan amount," said Lisa Lee Freeman, the money advisor for Consumer Reports. "And, the more points you pay, the lower your rate. And that can be a good thing, especially if you're planning to stay in your house for more than a few years."
An investigation into the $395 flat fee resulted in three different representatives offering three different estimates to Consumer Report's reporters. The range between the offers was more than $1,000.
Industry insiders advise consumers that they should assume that offers that sound too good to be true most likely are, and that conscientious consumers should investigate multiple offers from lenders.
DiTech continues to assert that it offers adequate disclosure of its fees and taxes to consumers.
By-Consumer Reports
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Average Score: 3.81
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