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Mortgage firm offers loans that don't require borrowers to set up escrow funds

Mortgage firm offers loans that don't require borrowers to set up escrow funds
In a major break with industry tradition, one of the country’s largest independent mortgage companies wants to free the masses from mandatory escrow accounts and let borrowers go DIY. Michigan-based United Wholesale Mortgage, which has a network of 7,000 participating brokerage firms nationwide, has begun offering mortgages with no requirement for escrow accounts — and no penalty for the privilege. “We don’t think it’s right to charge” more — typically a quarter of 1 percent (0.25 percent) of the loan amount — “for something most borrowers can handle” on their own, says Mat Ishbia, United’s president and chief executive. “On a $400,000 loan, is it right to charge an extra $1,000? We don’t think so.”
In a major break with industry tradition, one of the country’s largest independent mortgage companies wants to free the masses from mandatory escrow accounts and let borrowers go DIY. Michigan-based United Wholesale Mortgage, which has a network of 7,000 participating brokerage firms nationwide, has begun offering mortgages with no requirement for escrow accounts — and no penalty for the privilege.
 
“We don’t think it’s right to charge” more — typically a quarter of 1 percent (0.25 percent) of the loan amount — “for something most borrowers can handle” on their own, says Mat Ishbia, United’s president and chief executive. “On a $400,000 loan, is it right to charge an extra $1,000? We don’t think so.” 
 
 
 

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