Re: Ask Anything About Mortgages
 

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I'm a loan processor. The Broker that i work for, has a correspondent division, plus we also have all the wholesale branches that we can use. So we have the correspondent division of Countrywide, plus we have the wholesale division.

We also have a like 12 banks that are correspondent plus a ton more that are wholesale. I guarantee that i could get just as good if not better of a rate than any Bank.

This makes it better to go through good brokers so the borrower saves time not having to go to 3 different banks.



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I agree... this is how brokers used to work and their original function.

However, and be honest... how many of these deals are closing at Par???

How many of these deals come through without the broker padding either the points (on the Hud-1)... or bumping the rate by 0.375% to earn another rebate point from the lender???

I agree that a Broker COULD find the best rate... what I'm saying is that this best rate is not being passed on to the customer.

Re: Ask Anything About Mortgages
 

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[ QUOTE ]
I'm a loan processor. The Broker that i work for, has a correspondent division, plus we also have all the wholesale branches that we can use. So we have the correspondent division of Countrywide, plus we have the wholesale division.

We also have a like 12 banks that are correspondent plus a ton more that are wholesale. I guarantee that i could get just as good if not better of a rate than any Bank.

This makes it better to go through good brokers so the borrower saves time not having to go to 3 different banks.



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I agree... this is how brokers used to work and their original function.

However, and be honest... how many of these deals are closing at Par???

How many of these deals come through without the broker padding either the points (on the Hud-1)... or bumping the rate by 0.375% to earn another rebate point from the lender???

I agree that a Broker COULD find the best rate... what I'm saying is that this best rate is not being passed on to the customer.

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Ummm, of course they arent closing at par. The only way the broker makes money is through a rebate or charging points. Most people dont like the idea of paying points. If we charged points, it would be at par. if we dont charge points, we will make the rate like 1/8 higher depending on some stuff, and get usually a 1 point rebate.

How do you make your money if you dont charge points or get a rebate?

Edit: And ya, some brokers or whatever will make a 1 point rebate and charge a point or just get a 2 point rebate or whatever, you just gotta make sure you know the broker or get referred from a friend.

Re: Ask Anything About Mortgages
 

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How do you make your money if you don't charge points or get a rebate?


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We get paid from the bank directly... usually .60 points on total fundings. However... this cost DOES NOT come from the borrower nor is it a HUD-1 charge.

I imagine its derived from some type of formula regarding the future earnings of that loan.

Usually, the rate you see form wholesale +.50% points for the broker is the par cost at the branch / bank level.

So, if your broker was content to make a 1/2 point from the lender direct, then that would be almost exactly the same pricing.

However, whether it's by increasing the rate (and getting paid by lender), or charging the points directly (and taking cash from the borrower)... i don't know ANY broker who works for less than 1 point.

Re: Ask Anything About Mortgages
 

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We get paid from the bank directly... usually .60 points on total fundings. However... this cost DOES NOT come from the borrower nor is it a HUD-1 charge.

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I think you already know this, but neither do the rebates we get.

Also, you work for a bank like B of A or whatever not a broker, right? Do you just get whatever clients come to the bank, or do you have mainly referrals.
Thanks

Re: Ask Anything About Mortgages
 

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I didn't want this thread to turn into a me vs. the broker type of deal.. but luckily you've just proven the most important thesis of the day...

don't trust Brokers... Thanks.

I'll be leaving shortly for the evening and will check back in tomorrow.

Looking forward to more questions and maybe even a bit of bantar from the brokers out there.

Sidenote: it took 90 posts of me giving out good, solid, helpful advice before a broker cut in... and ironically... all they seem to care about is me advising the public about their pay structure.

I didn't see any "brokers" posting about how to help the people understand their mortgages or advice on how to reach their financial goals. The brokers who are posting only seem to care about their bottom line... funny how that happens.

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I'm sorry, I didn't know that people wanted to hear about the 25 Christmas cards that I will get from my clients over the past year that all say essentially the same thing: "Thanks for helping us out so much. We can finally enjoy Christmas this year because of the work that you did for us."

The first conversation that I have with each of my clients is about one thing, their goals. About 90% of my business comes from referrals, so my clients must be pretty happy for the service that I am providing, whether I charge them 2% or not.

I love the fact that you immediately think that I am coercing my clients into signing the Good Faith and HUD. My clients are well aware that they can walk at any moment, yet I seem to do fairly well for myself, and so do the Loan Officers that I train.

In no way am I saying that retail lenders are worse than brokers or vice versa. I was just responding to the the fact that the first piece of advice in this thread was not "Monitor your credit" or "shop around for the best rate", it was brokers are crooks.

P.S. Of course there are Wells Fargos and other banks that offer mortgages, however, the wholesale lenders that offer the best rates are companies like Mortgage Network, Provident Funding, and American Mortgage Network. The last time I checked, they don't do a lot of retail business.

Re: Ask Anything About Mortgages
 

To the brokers:

I have a friend/acquaintance who is representing me as selling agent on my house, and is also acting as broker for my next mortgage, once I find somewhere.

What kind of arrangements could you set up to arrange a loan for a casual friend (not close friend or family member) that would get them a better deal while also allowing you to make a fair, if slightly lower than normal, income from that loan?

Re: Ask Anything About Mortgages
 

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To the brokers:

I have a friend/acquaintance who is representing me as selling agent on my house, and is also acting as broker for my next mortgage, once I find somewhere.

What kind of arrangements could you set up to arrange a loan for a casual friend (not close friend or family member) that would get them a better deal while also allowing you to make a fair, if slightly lower than normal, income from that loan?

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This is very very easy. Send them another loan or two. This [censored] happens all the time. Real Estate agents get amazing loans.

Re: Ask Anything About Mortgages
 

How does that get me a better loan?

Re: Ask Anything About Mortgages
 

Can I get a mortgage without a job? I quit both my 2 year+ jobs for poker about 6 months ago. I plan on putting down 50%+ of my home. My only credit history is student loan, credit card etc. Any chance? (Canada also fwiw)

Re: Ask Anything About Mortgages
 

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However, 1% neg-am loans are the fasting growing segment in the market (per the WSJ).

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the popular press can be laughably bad in it's articles about mortgages. i can show you plenty of research from the major investment banks or from Countrywide's mortgage research arm that show how option arms have been decreasing steadily for the last year and a half. early 2005 was the peak of option arm origination. also, the 1% teasers are much less common than they were just last year, when it was more common to have 3 months of the teaser rate instead of just 1. origination of standard 30yr fixed rate mortgages has been rising over the the last several months.

the reason it was easier to sell the option arms a couple years ago was because most were indexed to a moving treasury average instead of to LIBOR, and at the time short rates were being raised while the MTA index is a lagged number by construction so the rate appeared lower. as the MTA number caught up, it was harder to hide the higher margins. i'm sure all the NYT and WSJ articles about option arms being evil hurt origination numbers as well.