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Punishing brokers for perceived sins of the past is unfair, expert says

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Mortgage Professional America | 23 Oct 2013, 06:00 AM Agree 0
Mortgage brokers took a lot of undeserved heat for the housing meltdown, but consumers need to know that using a broker is still one of the best ways to shop for a mortgage, according to the Washington Post’s real estate columnist
  • John | | 23 Oct 2013, 09:23 AM Agree 0
    Much of the information in this article is false. I have been both a broker and a banker. I can tell you that it is soooo much harder to close mortgages as a broker than as a banker. As a broker it took me longer than 30 days usually to close mortgages. As a banker I am closing them in about 2 weeks. I believe this is due to the fact that I have an in-house underwriter and processor who are on my team. As far as only have 1 product this is also a load of crap. My bank sells to multiple investors who allow us to offer pretty much any product that exists in the market. Also, because we send those investors so much more business than a broker does, they give us pricing specials which allow us to beat out the rates that they offer to their mortgage brokers. I'm sorry, but the mortgage broker just can't compete like they use to.
  • Tim K | | 23 Oct 2013, 09:27 AM Agree 0
    I think it is important to point out that Mr. Frank and the others in congress did not and most likely still do not understand the mortgage broker business.

    If they did they would understand that NOT ONE broker created, underwrote, sold to the secondary market one sub-prime mortgage. That was the roll of the Big Banks and Wall Street.

    Brokers originate mortgages.

    We don't underwriter them.
    We don't approve them.
    We don't sell them to the secondary market.
  • Tracy L. Strickland | | 23 Oct 2013, 09:33 AM Agree 0
    It varies by situation of course, but I am a broker and typical turn time is from 3 to 4 weeks. I recently picked up a client that went to Chase and was told it would be an estimated 120 day turn time...on a purchase transaction. At least this one was honest, usually they just say 30 days and then spend the next 30 days saying "two more days...."..
  • Jim | | 23 Oct 2013, 09:35 AM Agree 0
    John probably went back into the Banking Channels for a small salary and pay because he wasn't successful as a Mortgage Broker. We are closing mortgages in 16 days and do NOT get beat on rate by any bank. Banks are slow, do not return calls timely, and give our clients bad information
  • Kim M | | 23 Oct 2013, 09:37 AM Agree 0
    John it goes both ways. I am a broker and depending on your choice of lender we can close in 10 and other cases 30-45. MOST of the bankers in our area do only have 1 or at most 2 choices. There obviously will be banks to the contrary but for the most part he is correct for alot of areas.
  • John | | 23 Oct 2013, 09:40 AM Agree 0
    John, I too have been on both sides and I am currently a broker. While I have no reason to not believe all that you indicate, your experience at a bank is not typical. A broker in general has the full menu of products that a typical bank simply cannot support. It is also difficult to compete with a brokers "team" including our underwriting partners. I wish you continued good luck - but as for me - I love being a broker!
  • Brian | | 23 Oct 2013, 09:42 AM Agree 0
    I've yet to find a bank that can compete with me. I lick my chops when I see my potential borrower is considering his bank. Hands down easiest mortgage to beat. When the change to licensing came about with brokers, considering credit and criminal histories, all the bad brokers jumped to the banks because they couldn't qualify as a broker. Closing mortgages in 2 weeks is common place for me....I've got many choices. Doing this 21 years now, started out as a banker for the first few.....see no need to go back to the corporate ball and chain.
  • Mary | | 23 Oct 2013, 09:50 AM Agree 0
    John,
    I agree with you in that it is so much harder to close our mortgages as third party originators. Our mortgage documentation is scrutinized more. It gives me pleasure to close mortgages from borrowers who applied at the big banks and no one could help them there. Brokers invest endless hours in reviewing guidelines in order to fit a mortgage scenario. Brokers give back so much of the YSP credit to borrowers; much more than bankers/banks who do not need to disclose. So bankers have better lobbyists. are richer than the broker. Enjoy it until the heat points at you and become the scapegoat for all financial troubles. My opinion
  • Broker4Life | | 23 Oct 2013, 09:51 AM Agree 0
    Sorry, John that your short extent as working for a mortgage broker was unpleasant. Don't be bitter because you could not pass the national exam and HAD to go work for a bank. I'm like Jim and Kim and I'm closing mortgages in less than 3 weeks all the time. It's all based on knowing how to document a mortgage file the first time it is underwritten. Again, it's all in being educated on what you do and doing it right the first time around.
  • John Deleva | | 23 Oct 2013, 10:09 AM Agree 0
    The industry with the weakest associations and thereby limited lobby suffered most of the blame. The lesson for mortgage professionals should be clear, support our state and national associations.

    To demonstrate my point, the Banks, Realtors and many on Wall Street mysteriously avoided blame...they have well established association and lobbyist reach, end of story. The Banks and Wall Street dreamed up the products and brokers and bankers with little choice but to compete offered them. Our politicians targeted the weakest…when you have no defense go on the offense.

    As for the Realtors they played a significant role, a role never exposed. Prior to the late 90's subprime was very limited and Realtors were satisfied with the conforming channels of finance and their long established relationships with conforming lenders to include banks and non-bank entities. In the late 90's the subprime brokers flooded many markets and Realtors in pursuit of quicker closes, less paper work, reduced potential of having to navigate repairs prior to closing and outright scam deals that were rumored to include kick backs shifted their allegiances to the "we can close any deal" crowd.

    More and more buyers were being referred to subprime shops for reasons only having to do with getting the deal closed and little to do with what was in the best interest of the buyer. Many such buyers if properly counseled could have been eligible for conforming finance. I remember clearly how often I was asked to close a mortgage in 2 or 3 weeks and was essentially fired when I insisted the correct finance option would take longer and off the Realtor went with their client to the subprime lender who could close the deal with less hassle and time. The Realtor played a substantial role in the rise of the subprime lender and to date I have read little about this truth.

    Many were to blame to include the mortgage industry but the public will only associated the financial crisis of 2008 overwhelmingly with mortgage lenders…those of us that were there long before and now well after know better. The financial crisis of 2008 is complex in the making, I don’t purport to be wise in all matters that paved the way to the crisis but I am certain the blame fell unfairly upon too few. For those of us left, let’s show the public that the mortgage profession is a profession worthy of respect by always placing our client’s interest before our own, in doing so ours will be served.

    Respectfully,
  • jb | | 23 Oct 2013, 10:19 AM Agree 0
    John obviously does not work for Bank of America because those guys are unbelievably slow. Months and months and months to refinance a mortgage that is already with them, a straight rate and term refinance for a borrower with great credit and income. Horrible service, lost paperwork, excuse after excuse.
  • Nanci Brogan | | 23 Oct 2013, 10:21 AM Agree 0
    As a broker, I spend time analyzing the absolute best program with the absolute best lender for my client! I take the challenging mortgages, which the banks discard. I close all my purchases on time and should a lender cause any delay in funding, that lender is no longer used! I have passed the licensing in multiple states and I pride myself on my honesty and integrity!
  • Charles Stidham | | 23 Oct 2013, 10:26 AM Agree 0
    This article is "spot" on. I have been a broker for 18 years and when I have a customer shopping me against their local bank I give them a list of 5 questions that need to be answered by me and/or there local phone telemarketer..................errrrrr............ bank representative. Each question is supremely important to the efficient closing of their mortgage. 99% of the time the buyers come back to me because the bank representative could not answer ONE of the five questions. I compete daily against USAA, SWBC and all of the big banks. My rates and fees are lower and we close mortgages routinely in less than three weeks. And that goes for all mortgages: Conv, FHA, VA, and USDA. Comparing a bank representative to me (complete with a Master's degree in Public Policy from a REAL 4 year university) or compraing me to a big bank "1-800" phone representative is like trying to ask a Chevy Malibuy to be entered into the Indy 500. It's not even a fair fight. Lastly, when QM takes effect on 01/01/2014 my business will flourish even more because banks will use this opportunity to try and misinform consumers that rules are even tighter and therefore they will charge an even higher rate and more fees. Thank you for bringing light upon this subject.
  • Dawn M | | 23 Oct 2013, 10:27 AM Agree 0
    To John who claims that much of what is in this article is wrong....I beg to differ. Having been in this industry for over 33 years, I too have been a broker, a banker AND have been a retail bank mortage originator. This article is simply stating that brokers shouldn't be punished for the sins of past brokers who were either predatory or fraudulent and that the good ones bring a much larger menu of products and more competitive wholesale pricing to the table. As for turn-times, if a reputable and experienced broker has a solid relationship with the big mortgage lenders and banks, then underwriting and closing turn times should only add a few days. Rates and pricing are typically better than if the customer went straight to the bank. Furthermore, the article refers to local or community banks with limited products, not necessarily "bankers". I am a broker now and because of my experience and integrity, all of my business is referred to. Because we are a small company, we have no advertising overhead which we all know equates to savings for the consumer. Although my clients "shop" from time to time, they usually find that the retail banks can't compete with the rates and pricing that we can offer them.....even if we are selling it to the same bank that the consumer called.
  • Dave | | 23 Oct 2013, 10:30 AM Agree 0
    Contrary to what John (at 10/23/2013 9:23 am), much of the information in this article is true. Probably John did not know which wholesale broker to work with. There are so many broker who provide better rate than a banker any date. Most escrows are 30 days so closing mortgage in two week is although a plus however not required for most escrows because either buyer is not ready to close or the seller is not ready to close in 2 weeks. Also, I have closed mortgages in two weeks with wholesale brokers many times. And my experience banker charge higher rate (not good for our client) to close early. In general, a broker is much more knowledgeable than a banker and retail mortgage offer because broker works with so many lenders who provide different products and variety of mortgage program.
  • Rob | | 23 Oct 2013, 10:31 AM Agree 0
    As a broker I have been getting approvals in 5 business days and closing in another 5. I use the small regional banks that are quick and nimble. Brokers that couldn't pass the tests or criminal checks all ended up at the 4 big box banks.
  • Matt | | 23 Oct 2013, 10:37 AM Agree 0
    John,

    Your focus should be on the client. If that's truly your focus, you know that you're NOT giving the client the best deal when it comes to rates and fees, if you're a banker. So you may be able to close a week faster, you're still costing the consumer due to higher rates and fees. I have NEVER and will NEVER get beat by a mortgage banker when it comes to pricing.
  • JC | | 23 Oct 2013, 10:37 AM Agree 0
    Mortgage bankers can act like a broker but most actually broker as well if they offer more products. Even some banks broker but most find it very difficult to offer a variety of programs due to their regulators. There is really no reason either should have a time or price advantage. High-volume brokers get similar pricing to correspondents. Any advantage to the banker gets eaten up by extra costs for QC, legal fees, audits, etc. If the banker isn't paying those, they aren't long for this world.
  • Dan | | 23 Oct 2013, 10:44 AM Agree 0
    John #1: you are a BankER not a Loan Officer at a Bank. You are essentially a Broker with a different title that is able to hide your compensation. You function the same way a Broker does. Maybe your in house underwriter allows you to close faster than a bank, but as a Broker, we are able to place mortgages with Lenders that are responsive. Don't misrepresent that Brokers work differently than Bankers.
  • Viva la Revolucion | | 23 Oct 2013, 10:48 AM Agree 0
    Brokers only sold what lenders were pushing/willing to fund. Now the regulators punish the brokers, and the TBTF banks are only bigger and carry even a greater systemic risk. Complete and utter failure of govt. (unless, of course, you subscribe to the theory that it is all done on purpose to drive the broker out of business and funnel all business to the big banks (i.e. the ones with the millions of dollars to spend on lobbyists). As David Bowie sang: "This is not Amerika".
  • Jim | | 23 Oct 2013, 10:55 AM Agree 0
    Hey John...I'm a self employed BROKER that does business with a Fannie direct wholesaler with no underwriting overlays. I get 24 hour approvals, conditions cleared in 24 hours and docs out the same day as final approval. My wholesaler table funds just like your employer meaning I can close in 7-10 days. The biggest difference between you and I is my pricing is DRAMATICALLY lower than what you are offering your clients plus I am licensed, bonded and fully regulated (which you are not). My rate is way lower and my closing cost credits are way higher than what you offer for the exact same product....period. The borrower always wins by going to a reputable broker every time!
  • Tim M. | | 23 Oct 2013, 11:07 AM Agree 0
    I too have worked at a bank, a direct lender, a small mortgage broker and am now an owner of a small broker myself. Since I know what it takes to get the mortgage closed, we get that upfront and we can close as fast as the documents are clear and complete, sometimes 10 days sometimes 30 days but our average is just below 30 days. We win on rates and costs a majority of the time against banks and direct lenders because our margin requirements are less than a banks...simple math really. PLUS our customers really appreciate the personal service from start to finish.
  • Alan Openshaw | | 23 Oct 2013, 11:20 AM Agree 0
    John sounds like a lot of the Realtors that I know. I can't compete with Bankers. I AM COMPETING and doing very nicely Thank You very much! You may be happy being a banker and good for you. I have tried referring out of state deals to several mortgage bankers that I know lot and quite frankly their rates are not competitive so I have had to stop referring. It seems that the house percentage is just too high for them to compete on rate.
    Yes brokers have to jump through more hoops and bankers have in house underwriters and hand picked appraisers on their Appraisal rotation.....but wasn't that a part of the original problem. I will stay being a broker. I believe this allows me to act more in my clients best interests than any other form of origination.
  • Joe in MN | | 23 Oct 2013, 12:28 PM Agree 0
    John... really? True brokers represent a very small portion of the business. Most of us are correspondent these days. We originate, underwrite, fund and close our own mortgages - but for multiple lenders! A great way to describe us is a broker on steroids... I blow away any bank, any day of the week. As a licensed professional, versus an unlicensed bank application clerk - I win everyday with little effort over the one option clueless clowns answering the phone at 1-800-Big-Bank. I just need to talk to them. Unfortunately, most people call the banks first! Even with all the efforts from Barney Frank, Chris Dodd, and the CFPB to kill my much better side of the business, I still win! Anyone going to a bank... I feel sooooo sorry for you!
  • WLHarris | | 23 Oct 2013, 01:08 PM Agree 0
    John is right. This article and author's perspective are simply so much tripe (rubbish). Brokers were at the heart of the mortgage crisis simply because most brokers (definitely not all) were purely motivated by greed. That has not changed. There are still those true professionals that actually "care" about what is best for the borrowers. But, for the most part, today's broker is still being driven by greed and the mortgage program that the borrower is introduced to is the one that the broker will make the most on. MLO compensation rules have been mandated because brokers are clever and have made excessive profit on mortgages for no other reason than they could convince the borrower to do so. MLOs that work for a lender are subject to the same educational and licensing requiremetns as a broker. There is an exception for MLOs at banks, but that is supposed to change in the near future. As a secondary marketing professional, I have seen the quality and base greed that is evident in the mortgage being generated. My opinion is based on my experience. And my experience is based on actual production by both channels.
  • Matt | | 23 Oct 2013, 01:16 PM Agree 0
    Is WLHarris actually Richard Cordray? Not a SINGLE thing you said is correct. In case you're not aware, we make the SAME percentage on EVERY SINGLE LOAN!!!!! We CANNOT "steer" anyone in to a particular product to make more money. We also didn't invent the products that USED to be around.
  • John | | 23 Oct 2013, 01:59 PM Agree 0
    Wow! I guess there are only brokers that ready these articles. I think it's neat that you guys have found a way to survive. In my neck of the woods I can beat the brokers every single time in terms of service, speed, and interest rate. The only wholesale lender that I can't beat on rate is Provident Funding, and most clients don't qualify with them, and if they do, they have such a bad taste in their mouth after their experience that they vow to never use that broker ever again.

    Also, you guys really need to give up selling clients on the idea that brokers are more qualified because they have to pass a test. I have taken that test and you'd have to have crap for brains to not pass it. I'm serious...A retarded chimpanzee could pass that test.

    I do believe that if you are still in the business as a broker than you are probably doing business the right way. But you really need to stop telling the world that the business model of brokers is inherently better for clients, because it is just not true.

    P.S. I was successful as a broker but found that it was much much easier to provide a better service to my clients with a bank.
  • Rob | | 23 Oct 2013, 02:19 PM Agree 0
    John & WLHarris - I guess you have never heard of "Economies of Scale". This is where when an entity is smaller, their overhead is lower, so they can provide services without making as much money. Banks and Mortgage Bankers all have much larger operations than smaller mortgage brokers and must make more on every deal just to cover their overhead; ie - phones, admins, processors, closers, sales, cellphones, computers, etc. I have friends at all of the large banks that will call me every day to see where I am showing my rates, and they cannot compete due to Economies of Scale.
  • Kim M | | 23 Oct 2013, 02:22 PM Agree 0
    WLHarris....really you are so wrong...do you realize as a broker my mortgages are underwritten and sold my the lender whom I write the mortgage through! THEY are the greedy ones. Sure there were some brokers....but please what you are saying is rubbish. Ones who speak like this are obviously uneducated to how it works. My compensation iS SET on all my mortgages and competition in my area rates are higher!!! we set our compensation to beat the bank rates. Also if we go buyer paid we can get an even better rate and LESS compensation. People should only talk on subjects they know something about!!!
  • Dawn M | | 23 Oct 2013, 02:24 PM Agree 0
    John....sorry to burst your bubble, but you really have no business weighing in on this topic. You have totally missed the point.
  • NAMB Member | | 23 Oct 2013, 02:35 PM Agree 0
    I sure hope everyone and I do mean everyone commenting on this page is or will become a member of NAMB. While we can surely disagree amongst ourselves over various topics. One thing remains constant. United we stand and divided we fall! The mortgage industry as a whole is constantly under attack because the policy makers lack the education to understand it. Please join NAMB so we can have a united front. Even you, John and all those who side with him, need to join.
  • John | | 23 Oct 2013, 02:37 PM Agree 0
    Dawn- Please explain. Where have I missed the point? Does the article not say that brokers are inherently better than banks? I am simply trying to express that this is false based on my experience.

    Rob- What rock did you crawl out from under? Economies of scale refers to the idea that you have certain set costs as a business that do not change but as you do more business you become more profitable. Economies of scale are the cost advantages that banks obtain due to size, with cost per mortgage generally decreasing with increasing scale as fixed costs are spread out over more transactions. Because of this, a bank has a much greater advantage because we do more volume. Aside from this, our investors give us pricing incentives for the amount of volume that we deliver to them, that they can't offer a broker. It has NOTHING to do with an entity being smaller.

  • Wm Matz | | 23 Oct 2013, 02:59 PM Agree 0
    Many of these comments conflate two different categories into banks/bankers: mortgage banks and depositary banks. Mortgage banks operate more like large-scale brokers and can come close and occasionally beat independent brokers on price. But big banks are far higher.

    Monthly I survey the big 4 [Chase, Citi, BofA, Wells]. I consistently beat them by 2-3 points or 1/2-3/4% in rate on FNMA 30-fixed. Same for VA. [FHA is just legalized subprime.]

    If Negative John is competitive, he must be a mortgage banker. He sure is not a mortgage officer at a big bank.

    BTW, no veteran should ever do mortgages with a big bank due to their terrible record of foreclosing on deployed military and abusive pricing practices.
  • Dawn M | | 23 Oct 2013, 03:02 PM Agree 0
    John- Let's clarify. Are you a mortgage banker or a retail mortgage officer? There is a big difference.
  • John | | 23 Oct 2013, 03:03 PM Agree 0
    Sorry, I shouldnt' vent on an online forum. I think that you can find good and bad mortgage officers at both banks and broker shops. It is just frustrating when somebody claims that one model is inherently better than the other. The reality is that we are all glorified brokers and most mortgages end up with either Fannie, Freddie, or Ginnie anyways.
  • Alan Openshaw | | 23 Oct 2013, 03:06 PM Agree 0
    According to Rob's hypothesis Wells Fargo should be cheapest every time. Just because you are bigger doesn't mean you have figured out how to be more cost effective. What are the fixed costs in a small brokers shop that would not increase if we did more business? Hmm....let me see. The cost of the rent, the cost of a cleaner, and the cost of the license.....but that assumes that you get bigger without putting more asses in chairs, because if you put more asses in chairs you need more rental space. Are you saying that banks get bigger without putting more asses in chairs or did you take an economics class in High school?
  • Dawn M | | 23 Oct 2013, 03:10 PM Agree 0
    Wm Matz.....you have driven home the point that I am trying to make to John regarding the categories of mortgage lending.
  • Another NAMB and NAIHP Member | | 23 Oct 2013, 03:22 PM Agree 0
    The Broker channel has ALWAYS been more efficient and cost effective for the borrower. GFE 2010, HVCC/AI, LO Comp, QM..., you name it, they have all been designed to reduce the competative advantage of the broker while leaving banks to conduct business pretty much as usual. This is called 'leveling the playing field', or tilting it depending on your perspective.
  • Rob | | 23 Oct 2013, 03:44 PM Agree 0
    John - I can always beat the big boys because my overhead is not nearly what they have. They must have a breakeven point on every file in order to make it worthwhile to process. Why would they process a file below that point and lose money?? They wouldn't, and that is why we get better pricing than their own retail operations. Believe me, I speak with them every day. PS - The Rock I crawled out from under fell out of your head.
  • Rob | | 23 Oct 2013, 03:51 PM Agree 0
    I stand corrected. The word was misspelled.
    There is a finite upper limit to how large an organization can grow to achieve economies of scale. After reaching a certain size, it becomes increasingly expensive to manage a gigantic organization for a number of reasons, including its complexity, bureaucratic nature and operating inefficiencies. This undesirable phenomenon is referred to as "diseconomies of scale".
  • Shahram Sondi | | 23 Oct 2013, 03:58 PM Agree 0
    About time we have something positive posted for mortgage brokers. Fact is mortgage brokers are more regulated than most industries. We have got rid of most of the garbage brokers that had no business being in our industry. Mortgage brokers have the ability to beat the bank retail rates all day long. Brokers with integrity provide a better, more personalized service that large banks lack. I just did a press release today on prweb on the increase demand for mortgage broker http://www.prweb.com/releases/2013/10/prweb11261269.htm
    I have also attached a link to a youvideo promoting why consumers should use a mortgage broker. http://www.youtube.com/watch?v=utugwvQztMQ
  • WLHarris | | 23 Oct 2013, 05:29 PM Agree 0
    It is amazing that anyone would make a comment about someone else being ignorant or worse. You can express you opinion without name calling. I would venture to say that I understand the mulitude of compliance regulations, MLO compensation, and CFPB oversight better than most brokers. If you can't see how that a broker can make more from one wholesale lender than another, then you are obviously too far down the food chain to have negotiated the compensation level with the wholesale lenders. It is good that brokers and their MLOs are passionate about their roles in mortgage origination. I can only hope that they will apply that same passion to finding the best deal for the "borrower" rather than themselves. Anyone that does not understand that statement has not been in the industry for very long.
  • Matt | | 23 Oct 2013, 05:36 PM Agree 0
    WLHARRIS - If you're operating your business where you have different %'s for lender paid compensation with different lenders, then you may want to re-visit the CFPB guidelines. You should have every single lender giving you the same percentage of compensation. That way you avoid any "steering" nonsense.
  • WLHarris | | 23 Oct 2013, 05:46 PM Agree 0
    Matt - Not a broker so that doesn't apply. But, if you are negotiating the same margin with each of your wholesale lenders then you are definitely one of the good guys!
  • WLHarris | | 23 Oct 2013, 05:59 PM Agree 0
    So you can understand my perspective - I just reviewed a GFE from a broker with an excessive rate (i.e. .500% higher than actual market) with $9K in origination with a $9K rebate from the lock "with" .500 discount.
  • Shahram sondi | | 23 Oct 2013, 06:16 PM Agree 0
    WLHarris if you are not a broker and are a "banker pretender", then you need to find a different spot to comment on. Anyone that truly cares about what they do stays as a broker and makes a difference in our industry.
  • Matt | | 23 Oct 2013, 06:17 PM Agree 0
    Brokers can only get paid 1 of 2 ways. 100% from lender or 100% from borrower, not both in one transaction. I think that's fine that he charges it. It should be a free market. With that being said, he won't be in business soon.
  • JC | | 23 Oct 2013, 06:23 PM Agree 0
    The funny thing about WL's comments are that the broker is a "good guy" if he sets his compensation the same with every lender. But, every "banker" sells his mortgages to the highest bidder. The banker fixes the LO's comp at 1% and sells the mortgage at 4, 5 or 6%. They still charge a 1% origination and collect on the back legally. And you think bankers are good guys? I remember when banks paid the LO a half point and kept the rest. Brokerage is all that keeps them from doing that now. Sad that we see the little guys fighting for them instead of joining together.
  • WLHarris | | 23 Oct 2013, 06:47 PM Agree 0
    I continue to be amazed at broker perspectives. Lenders price their rates based on a "set" margin that is consistent regardless of rate. The lenders margin is typically half of the brokers margin so the idea that the lender is somehow making bank on the back side is ridiculous. If the lender sells a mortgage at 103.5, then lender will have paid 3 points out to the MLO and borrower (1 to MLO and 2 to borrower).
  • ACRAIN | | 23 Oct 2013, 09:55 PM Agree 0
    WL you stated you gotten a GFE from a broker which was higher. We'll over the years I have got deals from wells & Bank of America where the rate was .500 to .75 higher and the client begged me to lock at lower rate. I did not tell the client the bank was make 7 points on their deal but did not have to disclose it. I'm just saying the playing field should be level across the board.
  • ACRAIN | | 23 Oct 2013, 10:01 PM Agree 0
    WL you stated you gotten a GFE from a broker which was higher. We'll over the years I have got deals from wells & Bank of America where the rate was .500 to .75 higher and the client begged me to lock at lower rate. I did not tell the client the bank was make 7 points on their deal but did not have to disclose it. I'm just saying the playing field should be level across the board.
  • Bill M | | 24 Oct 2013, 10:24 AM Agree 0
    Banks need to play by the same rules and be held just as accountable as brokers. Barney Frank took care of his buddies and passed all of the blame and regulations onto the brokers. Banks are totally exempt from all state audits and that should change.
  • Matt | | 24 Oct 2013, 11:04 AM Agree 0
    Prospect Mortgage, one of the largest nonbanks in the U.S, has agreed to pay a $3 million penalty to New York State to settle allegations of deceptive mortgage practices tied to interest rate discounts
  • WLHarris | | 24 Oct 2013, 12:03 PM Agree 0
    July 13, 2011 WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) today announced an agreement with Prospect Mortgage, LLC (Prospect) to settle allegations the California-based mortgage lender created sham affiliated business arrangements for the purpose of paying improper kickbacks or referral fees in violation of Federal Housing Administration (FHA) guidelines and the Real Estate Settlement Procedures Act (RESPA). “The real test for any bona fide affiliate business arrangement is whether the affiliate has sufficient capital and employees to stand on its own two feet,” said Acting FHA Commissioner Carol Galante.
    “In this case, it was clear that these sham companies had neither and were merely sharing profits for the referral of business.”
  • Michael Taylor | | 24 Oct 2013, 12:54 PM Agree 0
    Great Article! I am an AE at United Wholesale Mortgage and I would love to offer my services to any broker who isn't signed up with us currently. We have great products. Give me a call so I can show you how to turn your pipeline multiple times with our Instant MI and Instant Funding programs. You can reach me at 800.981.8898 ext 3595
  • bgm | | 25 Oct 2013, 09:29 AM Agree 0
    I have worked for both in my 25 years in this industry both have positives and negatives, if you are an account holder at Wells or B of A or Chase you may tend to gravitate towards the bank based on your past experiences with that brokers have the ability to lock you in at one lender and if rates drop significantly they can get you a better rate as we are seeing right now. To say one is better than the other is clearly an opinion and we all have one.
  • Kim M | | 25 Oct 2013, 11:54 AM Agree 0
    Michael Taylor....LOve United Wholesale Mortgage.....Need to sign up if you are not already......Just Sayin!
  • Debi | | 28 Oct 2013, 03:48 PM Agree 0
    There is no comparasion between Brokers and Bankers. For the most part a broker that is an uneducated as bank employees will not stay in business. As a broker, you absolutely must educate yourslef on the industry and lenders to be successful. LO that work at a bank, know very little about how the ENTIRE mortgage industry works. Have no clue how to put a good deal together and direct to the proper mortgages. They push what Upper mgmnt tells them, and unfortunately.... consumers are very uneducated on how mortgages work. JOHN big mouth #1, perfect example. CLUELESS about how it works.
  • JC3 | | 29 Oct 2013, 11:20 AM Agree 0
    John, you had mentioned a few times that your bank has several investors and is able to offer numerous programs...sounds to me like your bank is basically brokering mortgages to other institutions
  • Don | | 31 Oct 2013, 02:36 PM Agree 0
    A person who resorts to words such as "Crap" or "Retard" in a public and professional forum obviously lacks effective communication skills.
    Truely, what neck of the woods as you put it John are you from!
  • Lee in CA | | 31 Oct 2013, 08:12 PM Agree 0
    This constant whining about "if they didn't offer bad products then I wouldn't have sold bad products" is a load of crap. The same quality products that are available today were available then. Was it the competitive environment that forced you to sell those "bad" products... maybe. But, the whole concept of "don't give me something to sell that is not good" is simply a refusal to accept responsibility for caring more about your income than your borrowers well being. I am an originator and I suffered from competition that was always too ready to "screw" the borrower with some ridiculous mortgage product. I may not have gotten rich like a lot of originators, but I never harmed any of my clients nor did I allow them to get involved in a mortgage product that was potentially harmful. It galls me to listen to listen to other originators "whine" about it being someone else fault.
  • Rick from No. CA | | 01 Nov 2013, 11:19 AM Agree 0
    We (brokers) are like turtle eggs on a private beach and the 5 major banks and Washington DC are the giants walking on their property. Eight years of over regulations and no end in sight. What they don't realize is that they are killing America's tax base. 17 trillion in the hole is deep. Most self employed brokers were paying 50% to taxes prior to 2005. Today, we are just trying to survive. Do you think the top 5 banks are paying 50% of there income to taxes compare to us brokers? Monopolizing is wrong. How can we recover from a 8 year old so call recession, when Washington DC is killing every opportunity to make jobs and economic growth for the self employed. What if the "Association of Mortgage Brokers" said you politicians are making to much money. We are capping your salary to half and no perks. We are the turtle eggs on the a private beach that nobody sees. Washington DC is out of focus. I pray, our heaven father saves America. Teach the politicians to love God first and love they neighbor.
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