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CFPB’s LO Compensation Measure Detrimental to Consumers

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  • Bryan Buck | | 25 Jan 2013, 02:17 PM Agree 0
    No one's under the illusion that whatever the CFPB dictates is intended to protect any consumer, are they?
  • lnichols | | 25 Jan 2013, 09:01 PM Agree 0
    The active NAMB lobby has forgotten how to feign shame after its members almost destroyed the global economy along with financial institutions that helped grease the gears of their greed. The CFPB's LO Compensation Measure is but one small and necessary consequence of FIRE's economic inferno. NAMB's argument against the CFPB's LO Compensation Measure because of imagined and invented increased expenses to consumers is a crocodile concern to conceal NAMB's goal for its members--profit. NAMB is a lobby organization that represents its members, not its members' customers.
  • Warren Goldberg | | 26 Jan 2013, 12:36 PM Agree 0
    Addressing the comments from "Inicols" above, unfortunately she subscribes to a totally inacurate, though common misconception about the true causes of the real estate crisis.

    While the true reason for the real estate collapse would take too much time and space here to explain, what I CAN tell you is that there were MANY causes for the crisis and many different parties, were at fault, including the banks, ratings agencies and even the federal government! While SOME mortgage brokers contributed to the problem, mortgage brokers as a whole were simply the scapgoats.
  • Mark Marlow | | 28 Jan 2013, 12:51 PM Agree 0
    Inichols must work for the Wells Fargo Protection Bureau/CFPB. In addition to being a real estate broker, I hold the mortgage banker and mortgage broker's license as well. One thing I have found to be certain over the pat few years is the mortgage brokerage channel provides substantially lower rates and fees to the consumer in 90% of the transactions. Currently I am working on a transaction in which I represent the buyer as a buyer's agent. Although I am not involved in the mortgage orignation, the customer ask me review the fees and rates that were provided to her by her mortgage bank. As is the case in most transactions, the rate is 3/8 higher and the fees are approximately $500.00 higher than is available through the brokerage channels. Of course none of the LO's compensation is disclosed in this banker's transaction. After reviewing thousands of fees and rates, there is no doubt in my mind that mortgage brokerages have the ability to offer the consumers substantially better pricing and in most cases far superior service. The CFPB's LO compensation rules will almost certainly cause most mortgage brokers to become mortgage bankers. This will undoubtly add additional layers of costs which will be passed on to the consumers in the form of higher fees and rates. Look for fees and rates to go up, LO compensation will continue to decline, and real and accurate disclosures regarding cost and fees will decrease.
  • IrvineMichele | | 30 Jan 2013, 04:39 PM Agree 0
    It's impossible to compare/contrast fee/rates from the initial disclosure docs - work off the final Hud-1 Settlement Statement, and then draw your own conclusions.
    The majority of the time, a brokered (third-party origination's) deal will not be cheaper in the end.
    Brokers have no control over last-minute unforeseeable fee's and will admit they can only "guestimate" what your total closing costs will be.
    Remember: the one with the "gold" makes the rules - & third-party originators do not have their own "gold".
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