Where is all the help for the Borrower?

sd · Joined: 07 Mar 2006 Posts: 19

There are thousands of sites for the brokers and they all have their rates posted but there is very little info for the borrower to see "real" current rates. If the borrower has that information he now can have a level playing field to work with. Many brokers do not want the borrower to see what he or she gets back from the Lender. The borrower has the right to know. After all it is HIS money that he is spending. It is true you cannot cover everyones product or every type of loan but for the good credit (620+) standard loan which is the vast majority of product done the borrower can get the best rate he can by getting the knowledge of how the system works. How do you as a borrower feel about that? Do you know as of today the current rate for a 30 Year is 6% with NO points or NO origination Fees. Knowing that this rate is possible gives you the ability to be able to work with a broker and get the best deal possible. It is a fact there are brokers that will work for a fair fee and treat you right. As we have said before this is for a standard conforming loan and may not fit all borrowers. It would be nice to hear from the borrowers on this subject. The borrower deserves to have all the knowledge he can to help him make a wise decision.

chow · Posted: Fri Mar 17, 2006 2:42 pm Post subject:

sd,

Can you explain to the Teeming Millions what a "Good Faith Estimate" and "Truth in Lending" disclosure is, and WHY they are required?

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Quote: Many brokers do not want the borrower to see what he or she gets back from the Lender. The borrower has the right to know

This is correct, and this is the reason that it is supposed to be displayed on the good faith estimate as to the actual amount of yield received.

6% is not doable anywhere in our market place. In Springfield, Illinois, you would already be out of business if you were offering this rate. Why? You can hardly afford to keep the lights on when you are paying your investers for the loans you are closing.

Perhaps our markets are different, but what I see around here are CD rates popping up nearing 5.5%. You tell me what happens to a company that advertises that they service their loans and they are offering their CDs at just under 1% less than the loans they are writing. Now lets think about what happens to that same company who has a portfolio full of loans they've written in the last 2 years where some are as low as 5%.

Sd, I've asked you for something simple. I just want to know your background. Who are you, what do you do. You say you're a secondary market kind of guy, yet you refuse to tell us who you are with.

Why are you so brave to post your comments about how much a company should charge, yet so frightened of revealing who you are?

sd · Joined: 07 Mar 2006 Posts: 19

Yes we all know they are suppose to show the borrower his fees but in truth they do not always do so and are subject to change prior to closing and do so many many times. When the borrower gets to the closing table he just wants to close. We all know it is a very confusing system and there was a interesting national syndicated article yesterday which said many of the same things we have posted about brokers making all different types of fees. There is no unity in the fees and this is what leaves the borrower confused. We feel the playing field just needs to be leveled. Do you not feel the borrower needs all the info he can get. Believe me the rates we have posted do just what we say they will do and many times pay the broker much more. How do you feel about the accuracy and validity of TIL's and GFE's. ? Maybe some of the borrowers out there can tell us how accurate their disclosures were when they FIRST recieved them.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

If they don't they can be reported for some rather hefty fines. We just went through an audit 2 weeks ago and I am happy to say that our GFEs (at least in our office) are pretty close to the final numbers as far as costs are concerned. (In our state borrowers usually receive a tax credit, which we are not allowed to list or include for purposes of loan approval.) This is coupled with the fact that when doing a loan in an area where we normally don't or are unfamiliar with, we follow up to find out what the fees are for the title company, appraisal, etc.

Mortgage bankers don't have to disclose their yield, so you won't generally see that on the good faith estimate either.

chow · Posted: Fri Mar 17, 2006 3:50 pm Post subject:

Golly, when I was a mortgage broker, I usually had my original GFE and TIL within $4.00 of the FINAL HUD1. When the borrower laid all of the cards in my table.

And, to think- I was a nasty, filthy, bottom feeding broker who was HUD approved. :roll:

(using my own personal savings and net worth to be a honorable "mortgage broker" to the public.)

I feel shame for my profession, and time spent here to assist the general public. I also feel shame for the loss of income I had to spend OUT OF MY OWN POCKET for my HUD approved status!)

Wait a minute...I could spend time finding that FHA loan investor that would take that manual underiting loan I needed.

SD-Did you?

sd · Joined: 07 Mar 2006 Posts: 19

Once again gents, this is your field of expertise. What does the all of this have to do with the borrower getting infomation so he can recieve the best rate. Just because someone makes a disclosure to them does not mean he is getting the best rate. He may not know he can get a lower fee or rate than shown if he does not have the knowledge. I never mentioned any post about the broker not showing his fees. But it is very confusing for the borrowers to sort things out and there are a lot of brokers charging all types of fees. We do not originate but the truth is cutomers have the right to know what he can get as much as the broker has the right to make what he wants. As a side note We looked at a broker sheet this AM in your area and the broker easily gets back more than our site shows. This is common information for brokers. 6.125 pays more than .50 today and 6 did yesterday afternoon with our rally. I believe this forum is also for borrowers to recieve info. Is that not correct?

sd · Joined: 07 Mar 2006 Posts: 19

We are not "hiding " anything. Our business has nothing to do with the borrower so it purpose is not important to this forum. We are just expressing our views from our 18 Years in this field. We have been though many refi markets and down markets and have seen a few things happen in our lifetime. . This forums purpose is to inform with information from other posters not designed to be a podium for a few. Everyone has his opinions but notice how many views are on the posts that we have posted and you can easily see people are interested in other viewpoints. We are not against any brokers just informing borrowers about the other issues to look at besides the brokers view.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Quote: Once again gents, this is your field of expertise

That is correct. So perhaps you can explain to us why it is that you are trying to tell us what *our* jobs are and trying to tell a consumer what they should expect from a lender, when you are clearly not licensed to be one, and seemingly have zero to little experience in dealing with a retail market.

Quote: We are not "hiding " anything. Our business has nothing to do with the borrower so it purpose is not important to this forum. We are just expressing our views from our 18 Years in this field.

You're clearly hiding who you are with (or attempting to at least) and while you may have 18 years in your field, as you clearly state it has nothing to do with the borrower and as such, I once again as you why is it that what you have to say as a self-promoted expert, should be listened to?

sd · Joined: 07 Mar 2006 Posts: 19

As a little side note in some areas of the country you may be able to get 6% 30 year fixed at No cost today.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

I do loans in all 50 states, so if you wouldn't mind giving me an example of an area where a company has a rate posted at 6% with no points today and where they do business I would greatly appreciate that, it would help me to know some more about some other markets.

sd · Joined: 07 Mar 2006 Posts: 19

A very small lender in your area is currently paying 100.31 for a 6.000 and is paying 100.56 in Florida. On a 6.125 they are paying 100.78 in your state and 101 in Florida. Not the best and not the worst just a example. We do not represent this Lender but their Rep was in our office yesterday and we recieved their rates today. As a Independent Broker you can get set up with many of these Lenders even with Wells as a independent broker on the wholesale side rather than the retail side. Their rates are not bad either. Then the issue becomes would you do a loan in your state at 6.125 paying you back 100.78. ($1560) on a $200,000 loan? Or do you want to make more? That would be your decision. Thats for a 30 day Best Effort by the way. About .125 more back to you on a 15 day. We are currently considering setting up a system on our site where we will be able to refer a borrower to a broker in his area where he would be able to get his loan done at the posted rates. We have a large client base of Brokers that we have worked with in the past years that would like to work with us . That was not our original intent for our site. Of course none of this post serves any real benefit to the borrower but really just for the brokers. Hope some of this helps if you are thinking of going out on your own. One of our past employees worked for Wells on the retail side. A lot of the brokers sooner or later go out on their own.

chow · Posted: Sat Mar 18, 2006 5:31 am Post subject:

Is there a 200K house in Springfield IL? :lol:

Gotta be, the median is 184K in Dec, which was down from 215K in the summer months. Not a good place to be a realtor since they only make 3-7% of every real estate transaction.

I think in my next life I need to model homes, get in the LO's way, dictate what kind of loan they need even though I haven't a clue in my dizzy blonde brain what they make for money, or what kind of credit they have.

And come to think of it- I can make 4-10 times more on the transaction and not have anyone blink, or mention a word of it. I wish I'd had this ephinany 30 years ago.

Well, time for my beauty sleep since sd called me a "gent." Nighty night!

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

I've already told you where my average pricing is, but that's on a retail pricing sheet.

There are homes that are up to the 300k price range, but they're not even right in the city. They're outside. Springfield itself is lucky to break the 200's, and very few isolated areas. Most deals are under 100k with the 2nd largest between 100-150k.

There were 240 home sales in the Springfield area last month. There are > 100 assorted lending institutions in a town of 110,000 people, with about 35,000 in outlying areas. That means that individuals such as myself who do 6 of those are making others go hungry. There are over 700 realtors licensed in Springfield alone. With an average loan amount of $78,000 for most in the area (mine is $135,000) I'm sure you can see why very few would consider that.

Also, I wasn't asking for a wholesale price. I was asking for a retail price. You said that they're offering 6% w/ no points. I'm saying show me a company who is selling that to a buyer and what their APR is. Most brokers make their money entirely on fees, so you're not going to walk into a broker shop in Springfield Illinois and get them to make 1/2 a point on a deal.

sd · Joined: 07 Mar 2006 Posts: 19

As we said before we are showing the borrower the fees the broker get from the Lender (Wholesale as you refer to it). With this knowledge they can make their deal with any broker they want. We mentioned previously we do not represent specific brokers. On a smaller loan size he may have to pay .125 in rate more (101.25-101.625 back to the broker). Our info shows the loan size average and of course it varies but it should not change the rate by more than .125 usually. It is entirely up to you (or your Boss if you work for one) what you want to work for. By informing the borrower of what the broker or Banker recieves back from the Lender he is able to make a more knowledgeable search for his mortgage. Have a nice weekend.

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