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Old 06-14-2009, 07:15 AM
 
Location: Charlotte, NC
7,041 posts, read 14,962,568 times
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Quote:
Originally Posted by gkleoni1 View Post
I am always more confortable with brokers for YSP disclosure alone. Banks can bump up your rate on the back to earn more money and NOT disclose it to you where as brokers at least have to disclose. They may not explain it to you but it will be on your paper work and if you ask you will find out you could have gotten a lower rate...
That's not legal. If a bank is doing that, they need to be reported to the OCC
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Old 06-14-2009, 07:33 AM
 
140 posts, read 321,656 times
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Quote:
Originally Posted by chicagocubs View Post
That's not legal. If a bank is doing that, they need to be reported to the OCC
Hi chicagocubs, of course it's not legal but few people actually read the original disclosures, but now it should be no excuse for anyone since apparently paperwork has been greatly reduced and people should not better.

I think a lot people have gotten rotten spoiled and think this is a mega easy process where they should not even get involved, they expect to close a loan in one week, and then they wonder why things happen.
I personally rather have a loan well underwritten and processed in a few weeks to get things done right.
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Old 06-14-2009, 07:53 AM
 
148 posts, read 421,648 times
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NACA is coming to charlotte
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Old 06-14-2009, 08:38 AM
 
Location: Charlotte, NC
7,041 posts, read 14,962,568 times
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Quote:
Originally Posted by Chef Giorgio View Post
Hi chicagocubs, of course it's not legal but few people actually read the original disclosures, but now it should be no excuse for anyone since apparently paperwork has been greatly reduced and people should not better.

I think a lot people have gotten rotten spoiled and think this is a mega easy process where they should not even get involved, they expect to close a loan in one week, and then they wonder why things happen.
I personally rather have a loan well underwritten and processed in a few weeks to get things done right.
this is very true.

Misplaced trust in a mortgage broker (or a bank, for that matter) could be very detrimental. You have no idea how many people I talk to on a daily basis that do not know the amount of their equity lines.... These are the same people that think that the equity line is "their money". SIGH.

Mortgage brokers (in the past) have not been the best source of mortgages; maybe some of them have learned their lessons and are straightening up?

Maybe the key is to have honest friends in the mtg industry to read over the paperwork with you to explain it to you properly?
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Old 06-14-2009, 08:39 AM
 
Location: Charlotte, NC
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Quote:
Originally Posted by rustygupta View Post
NACA is coming to charlotte
They've actually been here for years. They are just expanding due to volume.
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Old 06-14-2009, 09:57 AM
 
1,039 posts, read 2,992,964 times
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Quote:
Originally Posted by chicagocubs View Post
That's not legal. If a bank is doing that, they need to be reported to the OCC
OK so I was a Loan Officer for a bank but we also brokered out loans. From the start we were told if we wrote a loan for our bank we did not have to disclose yield spread but if we brokered loans out we did have to disclose yield spread. I do not remotely pretend to be an expert on mortgages but I worked for some of the most experienced well known people in the industry in the Charlotte area. I not only trust how they trained me but doubt they would have but their business and license in jeopardy but doing anything illegal. I guess I can try to research it in my old papers.
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Old 06-14-2009, 10:02 AM
 
1,039 posts, read 2,992,964 times
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That was easy although the source is kind of ify: Yield spread premium - Wikipedia, the free encyclopedia

In the U.S., mortgage brokers are required per the truth in lending act to disclose YSP within three days of the borrower's initial application on the Good Faith Estimate of Closing Costs, and then again as YSP as a fee "POC" (Paid Outside Closing) on page 2 of the HUD-1 Settlement Statement, inside the margin, away from the column marked "Paid from Borrower's funds at Settlement." This is a source of controversy, as similarly priced loans from banks require none of this disclosure.
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Old 06-14-2009, 02:52 PM
 
Location: Charlotte, NC
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Quote:
Originally Posted by gkleoni1 View Post
That was easy although the source is kind of ify: Yield spread premium - Wikipedia, the free encyclopedia

In the U.S., mortgage brokers are required per the truth in lending act to disclose YSP within three days of the borrower's initial application on the Good Faith Estimate of Closing Costs, and then again as YSP as a fee "POC" (Paid Outside Closing) on page 2 of the HUD-1 Settlement Statement, inside the margin, away from the column marked "Paid from Borrower's funds at Settlement." This is a source of controversy, as similarly priced loans from banks require none of this disclosure.
Probably the issue was that you did both; brokering and dealing with a bank directly. In essence, you were a mortgage broker for the client.

If a client deals with a bank directly, there are none of these shenanigans that go on. The rate is the rate. There is NO YSP...up front, on the back, anywhere. There simply is an origination fee of (typically) 1% of the amount of the loan. The other fees are required to be listed on the HUD, but, usually that is the only bank fee...the rest are third-party fees. In some rare occasions, there is an underwriting fee, but, usually not.

YSP for those that do not know, is a percentage of the loan amount that is paid to the mortgage broker for the privilege of his/her completing your loan. it is usually capped at 3%, but, that is on the "front end" of the loan, meaning that 3% is on your original loan amount. Now, if you finance in these fees (and others), your ending loan amount is higher. The broker can then charge an additional fee of 1-2% on the higher fee...which is the "back end" fee. If your loan amount is large, those fees can add up. Many times, also, brokers add on their own fees for underwriting or document preparation, etc...because they can and as long as they are disclosed, they are within their rights to do so. I have recently seen a broker charge a client to do a verbal verification of employment!!

When you deal directly with a bank...that is, you walk into the door (or go online) to your favourite Wachovia or BOA, these kinds of fees do not happen. You probably will have a 1% origination fee and maybe an underwriting fee, but, that would be it. (other than the fees that are paid to third parties, such as appraisal, tax and flood certifications, title insurance and title search and recording) Thus, this saves you A LOT of money.

I am a mortgage underwriter by trade. Currently, I deal with refinances and second mortgages. I used to work broker loans. They were among the most difficult to deal with because (many, not all) brokers simply wanted me to "max out" the fees allowed by law...and get as much as they possibly could from the customer (YOU). I found that reprehensible since a customer could do exactly what that broker did (for free) by simply walking into a local bank or credit union to apply for this loan.
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Old 06-14-2009, 05:42 PM
 
Location: South Charlotte
1,435 posts, read 5,749,876 times
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Then why has every client, friend, family member, or even several past client BANK EMPLOYEES gone through a broker to do their loan?

Because the rates made available to the wholesale market were always much, much better than what the bank offered on their retail/portfolio side. In addition, the mortgage brokers seem to have much, much more experience and knowledge than the paper pushers answering the phone over at the banks.
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Old 06-14-2009, 06:12 PM
 
Location: Charlotte, NC
7,041 posts, read 14,962,568 times
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Quote:
Originally Posted by Charlottean View Post
Then why has every client, friend, family member, or even several past client BANK EMPLOYEES gone through a broker to do their loan?

Because the rates made available to the wholesale market were always much, much better than what the bank offered on their retail/portfolio side. In addition, the mortgage brokers seem to have much, much more experience and knowledge than the paper pushers answering the phone over at the banks.
Well, if a bank employee is going to a mortgage broker, there must be something else going on...bad credit...something, because bank employees traditionally get discounted rates and no origination fees. it would be crazy for them to go to a broker and spend all that extra money....
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