Mortgage Professional America forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Forum firestorm over banker's comments that brokers are barely regulated

Notify me of new replies via email
Mortgage Professional America | 14 Aug 2014, 10:43 AM Agree 0
A couple of days ago, we reported on some comments made by the president and CEO of the Florida Bankers Association, and reader response was, shall we say, impassioned
  • Griff | | 14 Aug 2014, 10:55 AM Agree 0
    Sanchez owes an apology on Faux News where displayed his ignorance in the first place.
  • Buddy Arnold | | 14 Aug 2014, 11:01 AM Agree 0
    Here is a response from one mortgage broker to Mr. Sanchez.

    Alex,

    You will receive many messages if not already from your “potentially unintended” (I hope) ignorant statements made regarding wholesale originations, and primarily comments about “ mortgage brokers”. I have already received many messages from strong reputable brokers across the country that are angry by this (in which I share in this frustration). You compared mortgage brokers to “pay day lenders” and that we are not regulated? I’m sorry sir, but you are highly disconnected with reality. I am hoping this was a mistake and the term was used by mistake, but not sure how that slipped.

    Not only are mortgage brokers the most regulated sector with regard to origination in the industry (and some of the most experienced and educated originators working in this sector), but if run properly wholesale broker operations is the only channel in which consumers are not steered toward specials interests and credit lines with hidden margin. All originators are TPO’s to the agencies and investors that buy or insure these mortgages, period. Lines of credit and smoke and mirrors must stop in selling inaccurate “titles” to the public.

    I would like to better educate you about our sector in which you clearly do not understand. Making public comments derived from assumed ignorance must be corrected and parties must be held accountable.

    I am ashamed this came from someone in our industry, motivated by all the wrong things. Any professional in this industry that takes a consumer-first approach strongly disagrees with your statements. Truthfully, you cannot debate facts or math and the benefits consumers receive through wholesale lending.

    Here is my commentary over the last several years on all the recruiting nonsense and sales in our industry below (links), but please carefully choose your words and commentary when speaking to the public for the protection of consumers served in the primary mortgage market.

    I am taking time away from a vacation to send this message providing the influx of messages I have received from people across the US as I am a wholesale advocate. I am happy to discuss these matters with you anytime.

    http://www.thevantagevision.com/articles.html

    http://www.thefutureofmortgagelending.com/


    Andy W. Harris, CRMS | President
    Vantage Mortgage Group, Inc.
    15962 SW Boones Ferry Rd. # 100
    Lake Oswego, OR 97035
    503.496.0431 Ext. 302
    877.496.0431 Toll Free
    503.880.2427 Mobile
    866.438.5975 Fax

    Website | My Page | Reviews | Top 10 | Apply Now| Map



    3-Time Voted National Mortgage Professional Magazine's
    “40 Most Influential Mortgage Professionals Under 40”



    Andy Harris NMLS# 124161
    Vantage Mortgage Group, Inc. OR & WA State Licensed - NMLS# 35986
  • Randy | | 14 Aug 2014, 11:03 AM Agree 0
    Damn right he owes us a public apology. I find it hard to believe he is that clueless. I think this is a smoke screen he is throwing up in an attempt to divert the regulators attention away from him.
  • thatguyisaloser | | 14 Aug 2014, 11:10 AM Agree 0
    I know a former processor we had that wanted to originate. We told her she had to pass the test. She flunked it 3 times so we let her go. The next day she went to work for a local bank! Would you want her to originate your mom's mortgage?
  • Kevin Shanman | | 14 Aug 2014, 11:10 AM Agree 0
    Mr Sanchez is either ignorant or LITERALLY insane! I am a small (3 employees) mortgage broker. It is LITERALLY IMPOSSIBLE for me to solicit new business due to the backbreaking disclosure requirements. The reports required for the state and NMLS are a part time occupation in themselves; add to that the fact that EVERY LENDER WE HAVE interprets the disclosure regulations slightly differently which requires me to spend HOURS on a weekly basis making sure I am disclosing properly. As brokers we are required to disclose EVERY DOLLAR in compensation; bankers can hide ALL their compensation in the rate. I DARE him to spend a week in my office and not lose his mind. I cannot express my disgust at his statements more strongly- he is an idiot.
  • Jonathan Messeloff | | 14 Aug 2014, 11:29 AM Agree 0
    Absolutely, he owes us an apology. We who do not work for a Federally Chartered Bank have to be licensed, pass tests and go through yearly training. Those who work for those Federally Chartered Banks DO NOT HAVE TO BE LICENSED. For the most part, they are the ones who are giving "brokers" a bad name. If we defraud our clients, if we overcharge, if we mislead, we can lose our license. Not so the others. Mr. Sanchez, WAKE UP.
  • William Matz | | 14 Aug 2014, 12:11 PM Agree 0
    All good comments. He spouts same garbage Jamie Dimon did 5 years ago, trying to deflect blame from banks. Thousands who could not pass NMLS now work as LO's for banks. A local, 20-yr teller was told, "Now you're a LO." My biggest beef is that banks are ripping off veterans, charging 1% higher in rate to grab all that undisclosed overage. Fortunately, I just beat Citi in CA Ct of Appeals. Need to see many more million dollar awards against banks. Would be nice to see a couple go under.
  • Tom . | | 14 Aug 2014, 12:25 PM Agree 0
    We are audited by the State of Texas and we are audited by the CFPB. We are restricted under new guidelines under the qualified mortgage rule to charge only 3% which includes other fees. On the other hand, the bankers can charge fees and collect 2,3. or 4% service release premium. So, who is the deceitful one. The bankers won't tell you how much money they make but are trying to put more pressure on the brokers. The number of brokers in the State of Texas is about 25% of the number they had 4 years ago. Just wait till the banks get rid of all the brokers. We are keeping the banks in line by giving great personal service, better rates and are far more professional than the ill trained clerks who works in the banks. By the way, when was the last bail out paid the the U.S. Government to mortgage brokers. Nope, it went to the banks. Just what this country needs, the banks and our congress holding hands in corruption and lying about what the brokers do. Mr. Sanchez needs to just tell the truth and do his homework before stating lies.
  • David Feathers | | 14 Aug 2014, 12:27 PM Agree 0
    Please post your comments at https://www.facebook.com/SundayFutures and let Fox know that we as the Mortgage Broker community demand that the record be set straight.
  • | | 14 Aug 2014, 12:50 PM Agree 0
    Let me begin by stating I do not support Mr. Sanchez’s statements. Our industry will not be able to make our government listen if we cannot all find some common ground and bond together. Politicians listen to voters and an association with 5000 members compared to an association with 500,000 members makes a huge difference. Each state has an association and not all members of those associations are members of their own national association. Until mortgage brokers and mortgage bankers join together, our industry will continue to be overly regulated. Brokers would benefit a lot by supporting and joining bankers because money talks to politicians and the banks have the money. Just some thoughts I would like you to consider after reading some of the responses.
    - AUDITS –Mortgage brokers, in LA, are audited by OFI and the CFPB. The CFPB has only had the manpower to audit larger firms. OFI has not done an audit for over 2 years. So for the past 2 years 95% of mortgage brokers have not been audited. Mortgage Bankers are audited yearly by the FDIC, because they are FDIC insured to protect consumers from losses, OCC, OFI, CFPB, and if servicing their mortgages they are also audited by HUD, FNMA, and FHLMC. The cost of compliance has become so expensive for the smaller community banks that many have decided to not do mortgage mortgages. 9 of my customers have closed their mortgage departments since October 2013.
    - INCOME – Mortgage brokers on average make between $60,000 to $90,000 whereas a mortgage banker averages between $40,000 and $60,000. Most mortgage brokers are paid on a commission basis so the more income they bring in the more money they make. More than 60% of mortgage bankers are paid on a salary only basis. I find this is why most mortgage brokers do not go and work at financial institutions.
    - TESTING – Mortgage brokers, in LA, are required to pass one exam and then are required to take continuing education yearly. Mortgage bankers are required to take anywhere from 10 to 18 test a year in order to be compliant with the FDIC, OCC, and CUNA (Same as the FDIC but for credit unions) . This is a huge issue brought up by mortgage brokers because they are required to pass a test to hold a license. In order to work for an FDIC secured bank (which guarantees the consumer restitution) multiple test throughout the year are required with a passing score of at least 80% on each exam.
    - PROFIT – Mortgage brokers, in our companies 2013 auditing reports, made on average 2.5% whereas the mortgage bankers made on average 2.2%. HPML and QM have made it nearly impossible for either side to be able to make more than 3%.
    - FINES – It is more likely that a financial institution will have to pay fines because they are audited by at minimum three times a year. Unless a broker shop is large it is very unlikely they will ever be audited by the CFPB. It is therefore up to the state regulator to perform audits and we find most of these agencies do not have the manpower to audit more than 20% of mortgage brokers a year if they are even performing audits. This is why you see big banks with large fines. I believe both sides have made the same mistakes but the size of a company affects their chances of being fined.

    I understand there is frustration on both sides of the table however until our industry joins together as a whole we will continue to be over regulated. I hope understanding both sides of the table will assist in finding a common ground and will help squash some of the resentment mortgage brokers have on mortgage bankers licensing requirements. I have worked for both mortgage brokers and mortgage bankers to prepare them for their audits now for over 30 years. The cost of compliance for a financial institution well out ways any additional profit they may get from having the ability to fund their own mortgages. As you can see we are all in this together and there are benefits on both ends of the table but the biggest benefit would be to support each other.
  • Seriously Disgusted | | 14 Aug 2014, 01:05 PM Agree 0
    First, Alex Sanchez is incorrect. Mortgage Brokers are highly regulated. Nor has the money moved from the FDIC banking world. The banking industry dishonestly and erroneously blamed the financial crisis on the Mortgage Brokers! Does no one realize the Brokers had to use the programs made available by the Banks? Does no one realize the banks were, and are, also underwriting and approving the mortgages. The Mortgage Brokers did not create the mortgage programs that were, and are, available. Unfortunately, our government does not understand this. Not all brokers are good brokers, but seriously realize the percentage of bad bankers is at least as high.

    Also realize the banks that were too big to fail have grown dramatically in size!

    Appraisal must now go through an AMC (Appraisal Management Company). Take a look at who owns them, you're looking at the lender (not a broker). The price goes up and the appraiser earns less.

    You should know I am not a Mortgage Broker but do have experience in the industry (not originating).
  • JohnV | | 14 Aug 2014, 01:24 PM Agree 0
    Either he really is that ignorant and doesn't belong in his position as president of the Bankers Association, or he is purposely attempting to steer borrowers away from brokers. This further supports the argument that correspondents and mortgage bankers need to be subject to the same regulations and limitations that brokers are including caps on fees and total transparency.
  • Nancy | | 14 Aug 2014, 01:54 PM Agree 0
    I totally agree that he should apologize. But, not just an apology. He should have to go back to the media and be able to explain what we do as Mortgage Brokers in the Wholesale Channel and give a "factual" account of the money we save home buyers because of the disclosure and regulated commission structure that he does not have to disclose. Can he explain to the public that maybe the bankers are loosing business because of the rejection that people like him inflict on the average person by being constantly denied a quality mortgage or any mortgage at all? I really wonder if he could even pass the Safe Act test.
  • | | 14 Aug 2014, 02:24 PM Agree 0
    He should apologize publicly and be dismissed from his post. Idiot.
  • Anonymous | | 14 Aug 2014, 02:59 PM Agree 0
    I recently worked at Bank of America as one of 250 mortgage officers in their Sacramento call center. Two years ago they laid us all off with severance packages. Over 75% of the bank's "Licensed" mortgage officers couldn't not complete the new NMLS testing requirements for brokers as they tried to transition to new correspondent lending companies. The ones that couldn't pass the test chose to get on with another Federal Bank (all "in house" testing) or completely changed industries.
  • Rose T. | | 14 Aug 2014, 07:04 PM Agree 0
    Absolutely he should be required to retract his statement publicly. What he has done is a tort. He has slandered his competition to gain a business advantage without any truth to support the statement. I strongly urge any association in his locality or NAMB send him a letter demanding a retraction or be subject to suit.

    Further a complaint needs to be filed with the Florida state licensing authority. He is exactly the kind of lender that consumers don't need. I would not be surprised if he or his organization doesn't live up to their minimal licensing requirements if he can be so bold to make such statements against brokers. Anyone so ignorant to do so has to be desperate for business.
  • Robert | | 14 Aug 2014, 09:10 PM Agree 0
    I have been in the mortgage industry over 28 years. I had a brokerage company in NYS for 17 years, and the state of Florida for 6 years. We fully processed each and every mortgage. We submitted everything through DU or LP. We never processed any nonconventional type mortgages that the politicians and large lenders were in the Banking industry were pushing like candy to put anyone in a home. We had reps from many big banks calling on us daily. They just did not make sense.

    I am not sure how Sanchez was able to be elected and hold this position. It is evedent by his comment that his Intelligence level is very low, or he is totally unaware of any of the events that have occured in the same industry that he claims to be in touch with. It absolutely amazes me! Do not expect any hint of an apology. When you are that ignorant, the thought of an apology does not enter your mind.

    As a broker, my company was subject to ongoing audits, which I never failed. If a customer came to me and requested that we obtain a 75,000 mortgage, we had to advise that the rate was the same as the rate on a 300,000 mortgage. I now work at one of the top 4 US banks, where that is not the case. SO MUCH FOR YOUR IGNORANT COMMENTS SANCHEZ...

    In my company, every dime we made was revealed to the customer. I now work at one of the top 4 US banks, where that is not the case. SO MUCH FOR YOUR IGNORANT COMMENTS SANCHEZ...

    If I wanted to show the companies net worth, and it had enough to meet the requirements to obtain a banking license, we would still have had the mortgages approved through the lender that we chose. We might be able to close in our name using a warehouse line, then flip it over to lender the very next day, while being able to now hide from the customers what we made on the mortgage. Now there is a great example of honesty. ???

    In my company, it became impossible to bring someone new in the business and teach them the mortgage business. You know, free enterprize, entrepreneurship, building your company. I now work at one of the top 4 US banks, where that is not the case. SO MUCH FOR YOUR IGNORANT COMMENTS SANCHEZ...

    I could go on, but I have a feeling from the comments here, that everyone knows this guy is of a low quality IQ. So what is the sense. Quite possibly, the next person elected to this position may understand the industy, and will bot make such illiterate statements,
  • Robert | | 14 Aug 2014, 09:20 PM Agree 0
    comments on Sanchez, after spellin corrections

    I have been in the mortgage industry over 28 years. I had a brokerage company in NYS for 17 years, and the state of Florida for 6 years. We fully processed each and every mortgage. We submitted everything through DU or LP. We never processed any no conventional type mortgages that the politicians and large lenders were in the Banking industry were pushing like candy to put anyone in a home. We had reps from many big banks calling on us daily. They just did not make sense.

    I am not sure how Sanchez was able to be elected and hold this position. It is evident by his comment that his Intelligence level is very low, or he is totally unaware of any of the events that have occurred in the same industry that he claims to be in touch with. It absolutely amazes me! Do not expect any hint of an apology. When you are that ignorant, the thought of an apology does not enter your mind.

    As a broker, my company was subject to ongoing audits, which I never failed. If a customer came to me and requested that we obtain a 75,000 mortgage, we had to advise that the rate was the same as the rate on a 300,000 mortgage. I now work at one of the top 4 US banks, where that is not the case. SO MUCH FOR YOUR IGNORANT COMMENTS SANCHEZ...

    In my company, every dime we made was revealed to the customer. I now work at one of the top 4 US banks, where that is not the case. SO MUCH FOR YOUR IGNORANT COMMENTS SANCHEZ...

    If I wanted to show the companies net worth, and it had enough to meet the requirements to obtain a banking license, we would still have had the mortgages approved through the lender that we chose. We might be able to close in our name using a warehouse line, and then flip it over to lender the very next day, while being able to now hide from the customers what we made on the mortgage. Now there is a great example of honesty. ???

    In my company, it became impossible to bring someone new in the business and teach them the mortgage business. You know, free enterprise, entrepreneurship, building your company. I now work at one of the top 4 US banks, where that is not the case. SO MUCH FOR YOUR IGNORANT COMMENTS SANCHEZ...

    I could go on, but I have a feeling from the comments here, that everyone knows this guy is of a low quality IQ. So what is the sense? Quite possibly, the next person elected to this position may understand the industry, and will not make such illiterate statements,
  • | | 15 Aug 2014, 10:43 AM Agree 1
    I don't believe Mr Sanchez' comments were inadvertent. The banking industry has been relentless in its lobbying efforts to try to increase the regulations and education requirements on independent brokerages (with the intended or unintended consequence of putting these brokers out of business)
    They have consistently peddled the fiction that it was "unregulated" brokers who caused the financial difficulties of the recession. The truth is, mortgage brokers and mortgage agents now have more training and education requirements than bank mortgage officers, and far more transparency in fees and charges.
    If Mr Sanchez can point to a single CDO or MBS that an independent broker sold on Wall Street, or any bundled security which was sold to investors with an A rating (but was actually junk bond quality) then I'll concede his point. Until then, let's remember a little history. The Great Depression was caused in part by wild speculation and price fixing on the part on banks and Wall Street; the savings and mortgage disaster wasn't caused by small brokerage firms, and the Great Recession wasn't either. That's why big banks are now paying out billions of dollars in restitution (unfortunately, too little, too late) for their abuses of the financial system.
    During the recession, a lot of people closed their doors and many people lost their jobs and homes. Some of us independents managed to weather the storm and stay in business, and we did it without a multi-billion dollar bailout from the taxpayers. Can Mr Sanchez and his associates say the same?
  • | | 15 Aug 2014, 11:03 AM Agree 0
    Pete Foppiano
  • K.S | | 16 Aug 2014, 11:11 AM Agree 0
    What an ignorant your are, are you really a CEO bankers associations of Florida ?? we ( us the Brokers) need to fight back and stand out for this misleading comments, and for sure need an apologies to all brokers members which are Licensed ( Not the LO from banks, why?) trained every years ( are LO from banks?), regulated ( which we love), and Professionals looking out for the best of our consumers, because US can disclose all the nickels we make, I wander why banks do not ?
  • | | 19 Aug 2014, 10:26 AM Agree 1
    The bankers with the aid of their friends in the Legislature and regulatory agencies intend to eliminate the mortgage brokers in a similar fashion as was done to the saving and mortgage institutions. Public denigration with trumped up charges is an effective approach to eliminating competition.
  • Isabel Martinez | | 27 Aug 2014, 07:14 PM Agree 0
    Jamie Diamond propaganda, all over again. Mr. Sanchez must apologize to the Broker/originator Industry. but more importantly, We must bind together as one profession. We cant be divided amongst ourselves, otherwise we become easy pray to the bigger interest. Take a good look at the Realtor Association. Has the CFPB target them capping their income, demanding reduction of the 6% commission or for steering the buyer to "seller reserves services", like banks, title, escrows, etc. No, I say not! They are strong and vast in membership. Mortgage Brokers are scattered and see each other as competitors.

    Furthermore, As the cookie jar empties, Bankers are jealous of Brokers. This one Banker expressed that the brokers needs to close just one or two mortgages to stay afloat while they have to close many. They are jealous of the savvy broker/originator. Divide and Conquer! This is the strategy put in place by the Banking Industry using mouth pieces like Sanchez....
Post a reply