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Service Release Premium - Why You Should Never Trust Your Bank When Mortgage Refinancing
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By Louie Latour

If you are considering mortgage refinancing with your Bank you should read this discussion before committing to a Bank loan. Banks charge Service Release Premium with their mortgage loans, a hidden fee that will cost you thousands of dollars in unnecessary interest. Here is what you need to know about Service Release Premium and how Banks overcharge for their mortgage loans.

Service Release Premium is the markup Banks add to their mortgage interest rates to make a profit on the secondary market. Banks pool their mortgage loans together and sell them to investors and government backed organizations such as Fannie Mae and Freddie Mac. Banks are not required to disclose this markup to anyone due to loopholes in disclosure laws that protect homeowners from abusive lenders.

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The Real Estate Settlement Procedures Act does not apply to your Bank because the Banking Industry spent millions of dollars lobbying Congress to be exempt from the legislation. Because your Bank is not required to disclose this markup you will never know how much you overpay refinancing your mortgage with the bank. Here is how Service Release Premium works.

When you apply for mortgage refinancing with your Bank, they will evaluate your credit to determine what interest rate you qualify. The Bank knows what wholesale interest rates are, and mark their rates up hoping you will not shop around. Banks do not often negotiate mortgage interest rates, the bank employee will show you the interest rate sheet from that day claiming you are getting a good deal. What the bank isn

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This entry was posted on Friday, December 1st, 2006 at 3:16 am and is filed under Refinance. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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