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Old 08-15-2008, 07:50 PM
 
Location: Athens, GA
76 posts, read 369,464 times
Reputation: 56

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I would shop the rates with a Bank as well as a Mortgage Company. In some cases, a Mortgage Company may be able to get you a lower rate because they deal with a higher volume of loans. Don't use a broker because you will wind up paying more in points. How else does the Broker get paid? Brokers are for people who have "special" circumstances such as low credit scores, income which is difficult to verify, etc.

"Junk" fees are a thing of the past for the most part because the Banks and Mortgage Companies had no choice but to do away with such fees due to competition. Regaredless, every lender is required by law to give you a Good Faith Estimate prior to the start of the processing of the loan application. All fees in connection with the transaction are required to be disclosed at that time.
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Old 08-15-2008, 08:17 PM
 
Location: Cary, NC
1,036 posts, read 3,627,833 times
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Quote:
Originally Posted by GeorgiaGirl2 View Post
I would shop the rates with a Bank as well as a Mortgage Company. In some cases, a Mortgage Company may be able to get you a lower rate because they deal with a higher volume of loans. Don't use a broker because you will wind up paying more in points. How else does the Broker get paid? Brokers are for people who have "special" circumstances such as low credit scores, income which is difficult to verify, etc.

That is a huge misconception and wrong. How does a bank get paid? The same exact way as a broker. I do both, banking and brokering. In both cases, we make money the same exact way. We can charge origination fee and points, or not. We can make yield spread premium by brokering or service release premium by banking loans. Both essentialy work the same way, it is a fee paid by the lender to the originator tied to the interest rate and other factors.

A broker could be greedy and chage 3-4% of a loan amount, so can a banker. A broker can throw in "junk fees" and hope the borrower doesn't notice, so can a banker. The last few years both proved themselves to be equally guilty of being unethical, unprofessional and greedy in many cases.

It all depends on what broker/banker you use. There are great, low cost, professionals in both. Many studies show that brokers overall charge less between upfront and lender compensation than banks... after all most brokers have less overhead (who pays for those big bank offices and staff?).

It is true that the more "unique" the circumstances the more valuable a broker's services are. For simple, straightforward loans any bank will do... those that require more "shopping" are better for a broker. But even high quality clients can often save money with a broker... as long as the person is honest and fair with pricing.
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Old 08-17-2008, 09:59 PM
 
Location: Fort Myers, FL
1,286 posts, read 2,594,965 times
Reputation: 249
yea, sorry georgiagirl02, but you couldnt be more wrong.

i broker and bank as well. 9/10 times a bank will ALWAYS charge more. banks also have a reputation to change your deal and not notify you. you get to find out at closing when your rate is .5-1% higher and there are more fees.

the junk fees are from banks and most still have them. a lot of banks are hiding them in other fees to look like they dont charge them anymore.

another thing is, most banks pay there employee's salary, so that person doesnt even do the fees on the loan. but a broker makes strictly commission an has full control over this.

another wonderful thing is, a broker can always beat the same banks own pricing through the wholesale department. if you go to chase for a loan and have a broker shop the same loan at chase, his rate will always beat the banks retail price.

banks get a TON of business from loyal customers and they take full advantage of it.
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Old 08-18-2008, 04:42 PM
 
Location: Athens, GA
76 posts, read 369,464 times
Reputation: 56
Quote:
Originally Posted by brokerdave View Post
yea, sorry georgiagirl02, but you couldnt be more wrong.

i broker and bank as well. 9/10 times a bank will ALWAYS charge more. banks also have a reputation to change your deal and not notify you. you get to find out at closing when your rate is .5-1% higher and there are more fees.

the junk fees are from banks and most still have them. a lot of banks are hiding them in other fees to look like they dont charge them anymore.

another thing is, most banks pay there employee's salary, so that person doesnt even do the fees on the loan. but a broker makes strictly commission an has full control over this.

another wonderful thing is, a broker can always beat the same banks own pricing through the wholesale department. if you go to chase for a loan and have a broker shop the same loan at chase, his rate will always beat the banks retail price.

banks get a TON of business from loyal customers and they take full advantage of it.
It just so happens that I have managed the Secondary Marketing for a nationally recognized Mortgage Company who originated its own loans as well as funded loans for brokers such as yourself. Unless you work for free, you are charging points to your customers to get them a loan which they can get on their own by applying directly through a Mortgage Company or a Bank. The only way you can make it appear that there are no points or fees charged would be to secure the loan at an interest rate high enough which would yield you your fee upon the sale of the loan on the Secondary Market. Under this scenario, your fee would not appear on the HUD-1 Settlement Statement.

But you misunderstood what I was trying to say. There is a place in this world for brokers such as yourself because you folks are well versed on the various types of loans and programs available out there and can save the prospective borrower a lot of time and effort, particularly those borrowers who are difficult to qualify.

Sorry if my statements offended you.
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Old 08-18-2008, 05:34 PM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,098,079 times
Reputation: 952
Quote:
Originally Posted by GeorgiaGirl2 View Post
It just so happens that I have managed the Secondary Marketing for a nationally recognized Mortgage Company who originated its own loans as well as funded loans for brokers such as yourself. Unless you work for free, you are charging points to your customers to get them a loan which they can get on their own by applying directly through a Mortgage Company or a Bank. The only way you can make it appear that there are no points or fees charged would be to secure the loan at an interest rate high enough which would yield you your fee upon the sale of the loan on the Secondary Market. Under this scenario, your fee would not appear on the HUD-1 Settlement Statement.
With all due respect, YSP does appear on the HUD-1. We are also required to disclose it on the GFE in a dollar amount. Of course this only applies if the loan is brokered out. Mortgage lenders and banks do not have to disclose any YSP they may pay their employees and they certainly don't have to disclose SRP. Banks and direct lenders also charge points. Walk into any BofA branch and look at the marker board by the door with the mortgage rates. 3 sets of rates and points. Less points, higher rate and vice versa. I don't see how that is any different than what brokers do.

I don't think anybody is taking offense to what you are saying, but rather trying to seperate fact from perception. Accuracy is paramount on the forum.

For the record, I work for a direct lender with a wholesale channel and can broker loans as well. However, 90% of my business is run through the bankline, so I don't really have a dog in the "broker vs. banker" fight.
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Old 08-18-2008, 09:13 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,095,994 times
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So you're saying because a broker has to show the YSP, and the bank doesn't, that this means that the broker is charging more?

Have you seen the actual studies done where banks charge 1-1.5% HIGHER than a broker? It's a FACT that banks charge more than a broker.

Please stop embarassing yourself.

Also, if someone is going to 'shop' then let them shop EVERYONE. It doesn't take a rocket scientist to figure out that 6.25% is lower than 6.5%, and that 4000 is lower than 5000.

I worked at BofA, and they have charged more than most lenders out there. They came out with that no fee program which was really good, but now they have put a lot more restrictions on it.

I would also look at your statement, and stop giving false advice.
A Good Faith Estimate is allowed to have a 1-2% change at closing. This obviously allows a lender to readjust fees on the Good Faith Estimate. ALL FEES DO NOT have to appear on the Good Faith Estimate. They do have to appear on the HUD which is at closing.

How does a bank get paid? SRP/YSP/points/fees
How does a mortgage company get paid? YSP/points/fees
How does a mortgage get paid? YSP/points/fees

What's the other difference?
Banks dont have to disclose the SRP or YSP
Mortgage companies do not have to disclose the YSP
Mortgage brokers have to disclose EVERYTHING.


Quote:
Originally Posted by GeorgiaGirl2 View Post
It just so happens that I have managed the Secondary Marketing for a nationally recognized Mortgage Company who originated its own loans as well as funded loans for brokers such as yourself. Unless you work for free, you are charging points to your customers to get them a loan which they can get on their own by applying directly through a Mortgage Company or a Bank. The only way you can make it appear that there are no points or fees charged would be to secure the loan at an interest rate high enough which would yield you your fee upon the sale of the loan on the Secondary Market. Under this scenario, your fee would not appear on the HUD-1 Settlement Statement.

But you misunderstood what I was trying to say. There is a place in this world for brokers such as yourself because you folks are well versed on the various types of loans and programs available out there and can save the prospective borrower a lot of time and effort, particularly those borrowers who are difficult to qualify.

Sorry if my statements offended you.

Last edited by renriq02; 08-18-2008 at 09:22 PM..
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Old 08-18-2008, 09:35 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,095,994 times
Reputation: 1007
Broker is giving 6.25% with 4k in fees
Bank is giving 6.375% with 4k in fees

Are you stating for everyone to go with the bank because you don't want to pay a broker or because the broker is making too much money?

This is how you should shop a mortgage, and I advise all my borrowers to do this. This applies to A borrowers...

1. Compare the rates
2. Compare the 800 lines which show the lender fees (lender lines)
3. Compare the Truth in lending which should state the APR

Why shouldn't you compare the title/attorney fees?
Because these fees are going to be given to you by the attorney/title company. Here's an example...

Lender A
Lender fees 2000
3rd party fees 3000
Total 5000

Lender B
Lender fees 2000
3rd party fees 2000
Total 4000

Most people will automatically pick Lender B because of the lower fees.
The problem is that the 3rd party fees can actually be 3,000!
That will make both of them offers 'equal in fees'. Some borrowers automatically stop talking with Lender A because they feel like they're getting 'ripped off'. You should always talk to a few lenders, and make sure to compare the Good Faith Estimates together.

Most people don't know this, but Federal Law requires that the lender provides a Good Faith Estimate (GFE) when the lender receives a full loan application. Some borrowers call, and demand a GFE without giving any pertinent information (social, DOB, income, assets, etc)
Does the lender have to give the GFE? Not when an application hasn't been submitted. What if they quote you 6.25% because you told them your credit score is a 680. They finally pull your credit, and it's a 679. That can change your interest rate!

Hope this helps some people!
Please post questions in a new thread, and we'll be more than happy to assist everyone.
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Old 08-19-2008, 11:45 AM
 
Location: Fort Myers, FL
1,286 posts, read 2,594,965 times
Reputation: 249
i have only been beat price wise 2 times by a bank. my typical fee is $4k-$8k and i earn it. if you have read any of my posts, i have a lot of experience and i really do cater to my client on a financial level. my main source of business is investors, i am 100% referral based. those 2 banks that beat me, did special for clients that were part of there "private bank" which means they have millions in an account. 1 bank actually gave my client a 4% loan to trump me, lol. yes, 4% interest only, on this $3 million home. but they wanted his business, his banking was more important to them. i imagine he had all his boat, jet skis, etc. and car loans through them.

but dont get me wrong. years ago at another company, i had a in-company referral from another state. that guy was trying to charge $15k on the front and another $5k on the back. i told him no way and he was pissed. he made 50% of 2k on that deal, lol. what an ******* and that was his normal fees, cold calling people for BC loans from leads.
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Old 08-20-2008, 07:25 AM
 
Location: Richardson, TX
10,121 posts, read 16,721,272 times
Reputation: 24625
Quote:
Originally Posted by renriq02 View Post

There's no such thing of the VicePresident sitting next to the loan officer, and the loan officer will 'speak' to him/her. If someone is telling you this, then you need to move on.
Go with someone who is straight forward, and can provide a good rate.
Going to the guy who tells YOU what YOU want to hear may cost you a lot of money in the end.

This is true of the big banks like B of A, etc. etc, but at a small mortgage bank, the loan officer CAN speak to the President, and would not be lying to you. I work for such a mortgage bank, it happens every single day here, but we are considered old-fashioned in the industry, I don't know how many other banks like us are out there.
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Old 08-20-2008, 08:41 AM
 
Location: Happy wherever I am - Florida now
3,359 posts, read 10,635,552 times
Reputation: 3812
My advice - Spend $10. to open an account at any nearby Credit Union to become a member (a member owned institution usually not restricted by name). Historically they have had the best rates around. Have them lock you into a specific interest rate for a given period of time, often 30 days.

Paying points up front will result in a lower interest rate. OK, if you have the extra cash on hand. My choice was always no points, fixed rate, and a term as short as possible (15yrs best, max 20) to avoid addl interest cost, no prepayment penalty.
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