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Players laud CFPB move

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Mortgage Professional America | 10 Aug 2015, 06:00 AM Agree 0
The CFPB may be the perennial thorn in originators’ sides, but its latest move against marketing services agreements is garnering originator support
  • Cheryl M | | 10 Aug 2015, 10:42 AM Agree 0
    I also believe the CFPB needs to look further at the Real Estate Company too or go straight to NAR. They're not all on the same page regarding having deep knowledge of the financial industry and compliance. Such as Keller William, ReMax, etc... take a quick trip to one of those offices in mid to large city demographics they all have those "bank agreements" laying out for customers to either take with them, posters, banners, brochures/business cards, etc. Another that comes to mind Ryan Homes which steer all there new home build customers to there very own in house mortgage company. Quicken Loans has a deep marketing agreement steering those in Real Estate/Attorney offices...Quicken Loans keeps feeding leads when they agree to use Quicken, no Quicken, no lead...talk about too easy to abuse. I realize there are those long term relationships that have been hard to build in these industries; however, where is the long term relationship with an online site? It's also not just the larger banks either as noted in your article such as Wells, as we know larger mortgage banks; add too those local regional banks and credit unions. Now that we all know these marketing service agreements are risks, who's going out there to tell the Real Estate (NAR) industry about these new "rules" and their marketing agreements they're sitting on are now risk of abuse?
  • Ken Senior LO CT | | 10 Aug 2015, 10:55 AM Agree 0
    Many real estate offices like Bershire Hathaway, Century 21, Ravies have agents that constantly steer and lie. They tell the borrower that they must use their office mortgage company or they may very well lose the home. Do you believe it and it is being allowed or overlooked. I personally see many wrong doings and there should be legistlation not allowing real estate offices to be directly associated or engaged in the mortgage business. They do profit from the steering! Where is CSPB on this matter? Happens all the time.
  • Will, LO Houston, TX | | 10 Aug 2015, 11:35 AM Agree 0
    From my experience, the biggest abusers are the mid to large builders and their "preferred" lenders. They blatantly even write it in the contract that they will only pay the OTP or provide other credits IF you use their preferred lender(s). What they don't tell the home buyer is that the mortgage fees/rate will be higher with their lenders.
    Hey the money has to come from some where! This is exactly what RESPA is concerned about. Steering clients into higher priced options due to kick backs.
    I really hope the CFPB cracks down on these arrangements since RESPA doesn't seem to want to address it. When I called RESPA to complain, they told me that the builder's have convinced RESPA that these are just a part of "negotiations." What? Really?
    Maybe RESPA is getting kickbacks from the builders too!
  • JO | | 10 Aug 2015, 12:56 PM Agree 0
    I'm a lender who is not associated with a builder and who does lose business to the builder/lender agreements, but assuming those lenders offer worse financing terms is inaccurate. Often, the builders will buy long term forward commitments from the lenders ahead of time to ensure below market financing exists for their buyers. The buyers win on the finance side, the homes may be more expensive as a result, but they will be that price regardless of financing. Let's make sure we are all aware of the details so we can present a case that can not be easily rebutted.
  • Will, LO Houston | | 10 Aug 2015, 01:38 PM Agree 0
    JO,
    At least 15-20 times I have seen the pricing from these builder's lenders and only once was it comparable to mine. 95% of the time, it was much worse than I could do. In many cases, the buyer actually saved money with my mortgage even without getting the credits.
    That has been my experience in Houston. Maybe it is different in your neck of the woods.
  • Mike | | 10 Aug 2015, 02:49 PM Agree 0
    Are you referring to an end mortgage or a construction mortgage? Big difference, as with a construction mortgage, a builder wants a draw processed quickly. By dealing with the same lender and title company, they get a routine down, allowing more efficient processing of the draws, getting them (and the sub-contractors and suppliers) the money faster. This saves the builder money, which should in the long run allow builders to reduce their fees. As to MSA's, it is often hard to determine when a line is crossed. Realtors and lenders who penalize their agents and mortgage officers for not using in house companies, and tie in agreements prevents honest competition.
  • sbharkness | | 20 Aug 2015, 06:28 PM Agree 0
    Mike,
    Builders steer the buyers to use the bank that gave them the construction mortgage for the buyer's financing to purchase the home. This has been going on for the decades I have been in this business. As Will, LO from Houston Texas, correctly points out the mortgage the buyers will be given has a higher rate with more fees than if the buyer had chosen their own source of financing. The bank in turn then makes the next construction mortgage to the builder with even more favorable terms.....as long as he keeps steering the buyers to them for financing to buy the home.
  • Compliance | | 24 Aug 2015, 10:39 AM Agree 0
    Will - You called RESPA to complain... really?!!
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