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Old 09-13-2008, 03:25 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,103,707 times
Reputation: 1008

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Please don't twist what I wrote.

There's no such things as "inflated appraisals" or "nickle & dimeing".

Just because one lender is charging MORE than the other lender doesn't mean the first lender is 'ripping off' the borrower.
A business can only stay in business by covering the costs they incur.
They also have to look to make a 'profit'. They may have higher costs than another company so they will have to recoup these costs somewhere in a transaction.

This applies to realtors who need to meet the margin to recoup future or unforeseen losses. Their E&O insurance doesnt cover everything, and you will always have issues that happen.

Some of us understand these concepts because we're in the industry.
I see the costs everyday, and it's different everywhere you go.

Quote:
Originally Posted by sunsprit View Post
Sorry, but you're still making apples and oranges comparisons about the cost and value of services here. A stock broker with a great track record is still no better for me than what he does now and into the unforseen future with my money. I've been there, done that ... with multiple different stockbrokers who handled very large accounts with excellent above market return results and could show me on their computer screens the returns they'd gotten for others through the years. By the time I showed up with my modest account and told them I was "shopping" for a new broker and seeking their professional services to invest my money (with the forms filled out about my assets, risk tolerance, etc, as an investor) .... all of them basically put me into funds and stocks that were _rap. Just because they've done well for somebody else in the past doesn't mean that they will do as well for me into the future with my money at risk. This is purely a speculative investment made with my funds.

On the other hand, when I apply for a mortgage in today's marketplace, given my credit score, loan-to-value, assets, etc., I'm buying a financial product which is available in many forms from many sources with money to lend as their business. So, who's got the best deal for me? Will it be ... as you assert ... only an expensive broker who is the only one who can access the best lenders and the best rates on my behalf? Isn't it also possible that another broker with a lower fee expectation and lower overhead operation might be just as professionally capable and can shop my loan with the same lenders?

You can razzle-dazzle us about all of the potential problems that are averted solely by the seasoned high paid pro in the mortgage broker business, but this is the same BS that so many real estate agents use to baffle clients into thinking there's a lot of intrinsic professional value in the "services" they provide. Again, I'd say BS. For the most part, buying or selling real estate is a very simple transaction except for a very small percentage of "problem" properties where an agent or attorney might be of value to closing a deal. Of course, few real estate agents would want to admit to that .... far better to maintain the mystique which fuels their income.

Also, as posted above by another ... there's no such thing as "hiding" the fees, the commissions, and the charges any longer in the residential lending business. Any lender who tries to "rip off" a client with inflated appraisals, inspection fees, doc fees, extra high points, origination fees, closing fees, credit report fees, process fees, mailing charges, certified fund check charges, etc etc etc ... the "nickle & dimeing" of clients that's been done for years by abusive lenders ... is going to be caught out by knowledgeable mortgage seekers who will know to ask about these proposed charges in a timely manner and take their business elsewhere to a more ethical and reputable lender.

A more reliable comparison of what folks are buying as a business model would be to compare purchasing hard goods. With a mortgage to be purchased, who can deliver it to the buyer at the lowest net cost in the short and long term?
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Old 09-13-2008, 03:44 PM
 
10,874 posts, read 41,210,243 times
Reputation: 14020
Quote:
Originally Posted by renriq02 View Post
Please don't twist what I wrote.

There's no such things as "inflated appraisals" or "nickle & dimeing".

Just because one lender is charging MORE than the other lender doesn't mean the first lender is 'ripping off' the borrower.
A business can only stay in business by covering the costs they incur.
They also have to look to make a 'profit'. They may have higher costs than another company so they will have to recoup these costs somewhere in a transaction.

This applies to realtors who need to meet the margin to recoup future or unforeseen losses. Their E&O insurance doesnt cover everything, and you will always have issues that happen.

Some of us understand these concepts because we're in the industry.
I see the costs everyday, and it's different everywhere you go.
Now, I'm really baffled ... I responded to a quote from an entirely different poster and you come back with issues taken out of context from that exchange?

Read that as "inflated appraisal costs" such as were cited by the other poster, who claimed a bank could charge any amount they wanted for a appraisal while he, as a broker, could only pass through the actual charges ....

My point was, and remains ... that in using a broker to obtain a mortgage, you're purchasing a financial services product, not a speculative financial investment.

As a small businessman, I appreciate overhead and expenses and costs to make my living. Some folks have fancy offices in prestige addresses to capture their clientele, some choose a more modest route. But when it comes to purchasing a mortgage, those fancy offices with the latte machine and the receptionist serving them in the wood paneled conference room doesn't buy me a better product for my money than the fellow with a more modest business operation. I've seen brokers operate out of their home based offices who could deliver the same product for less money than a fancy downtown operation and they had no less expertise and ability than the storefront operation.
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Old 09-13-2008, 08:37 PM
 
Location: Land of Free Johnson-Weld-2016
6,474 posts, read 13,425,656 times
Reputation: 6404
Yes, I think I am going to repeat what I wrote. Once you find a broker, you can negotiate for free points and discounts on any fees. To get a mortgage, I also recommend calling a reputable bank or credit union not a mortgage "broker." Aren't they the people who gave out all those Alt-A, ARM and subprime loans? I believe banks and credit unions also pay their brokers salaries, so who cares how much the broker makes in profit on your loan? Once you have a loan, a reputable lender and product you like, you can negotiate for free points and discounts on fees. You have a good downpayment, a nicely-priced house and good credit. Go for it!
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Old 09-13-2008, 08:46 PM
 
82 posts, read 282,013 times
Reputation: 14
it's not buying a car but points and junk fees. junk fees can range from 0-1,500+ depending on the state and points are % of the loan amount. since you have ex credit you should be able to get a mortgage with low to no closing costs and a low rate. A lot of times brokers or banks advertise low rates but your closing costs will be much higher. What I suggest you do is find someone who will do a zero point loan with no closing costs...
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Old 09-13-2008, 08:55 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,103,707 times
Reputation: 1008
actually....wachovia/wells fargo/countrywide/chevy chase (banks) did.

remember that 'brokers' sell 'bank products'.

Quote:
Originally Posted by kinkytoes View Post
Yes, I think I am going to repeat what I wrote. Once you find a broker, you can negotiate for free points and discounts on any fees. To get a mortgage, I also recommend calling a reputable bank or credit union not a mortgage "broker." Aren't they the people who gave out all those Alt-A, ARM and subprime loans? I believe banks and credit unions also pay their brokers salaries, so who cares how much the broker makes in profit on your loan? Once you have a loan, a reputable lender and product you like, you can negotiate for free points and discounts on fees. You have a good downpayment, a nicely-priced house and good credit. Go for it!
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Old 09-13-2008, 08:55 PM
 
82 posts, read 282,013 times
Reputation: 14
And make sure you find somebody that is honest and won't hit you at the closing with extra fees. some real estate brokers or attorneys might be getting money to refer a deal over to the bank or mortgage company. The loan you are looking for is not that big so a fair amount for the banker/broker to make would be maybe 1.5% on the deal and pay some of your closing costs. That translates to about 6 percent on a 60 day lock. The market is very volatile now so instead of nickel and diming go with someone you trust. what I would do is mail you a package so you could see all the cost associated with the loan and if you want to do it you can send it back... I'm not licensed there so this is not advertising. If you are lost in a few days after contract I may be able to find someone for you. If there are no surprises you can get a mortgage anywhere. Check with Chase. If you have an account with them you get an even better rate...
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Old 09-13-2008, 11:02 PM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,101,771 times
Reputation: 952
Quote:
Originally Posted by kinkytoes View Post
Yes, I think I am going to repeat what I wrote. Once you find a broker, you can negotiate for free points and discounts on any fees. To get a mortgage, I also recommend calling a reputable bank or credit union not a mortgage "broker." Aren't they the people who gave out all those Alt-A, ARM and subprime loans? I believe banks and credit unions also pay their brokers salaries, so who cares how much the broker makes in profit on your loan? Once you have a loan, a reputable lender and product you like, you can negotiate for free points and discounts on fees. You have a good downpayment, a nicely-priced house and good credit. Go for it!
Exactly, so if you can find an honest, independent broker can that deliver better all around terms than a "reputable" bank (such as Countrywide, WaMu, Lehman, Goldman Sachs, etc.) than why wouldn't you go with them?

Also, third party fees are not negotiable. Third parties charge what they charge. You can negotiate with the lender to pay some or all of those fees for you, but it will cost you in rate and that rule applies wherever you go.
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Old 09-14-2008, 10:04 AM
 
10,874 posts, read 41,210,243 times
Reputation: 14020
Quote:
Originally Posted by Daddys///M3 View Post
Exactly, so if you can find an honest, independent broker can that deliver better all around terms than a "reputable" bank (such as Countrywide, WaMu, Lehman, Goldman Sachs, etc.) than why wouldn't you go with them?

Also, third party fees are not negotiable. Third parties charge what they charge. You can negotiate with the lender to pay some or all of those fees for you, but it will cost you in rate and that rule applies wherever you go.
Again, I'll say BS on this point.

I've been down that road, too ... where a lender required an appraisal from their "short list" of "approved" appraisers in an area. I asked what the appraisal would cost from the lender, and they quoted a figure as the "standard" fee from the appraiser I had selected.

The lender was unaware that I'd previously had an appraisal done by that appraiser (for contested property tax assessment purposes) within a year, and I knew that I'd paid about half of what they were quoting me for the fee. I called the appraiser directly and asked him why the fee was now so high, and he adjusted his fee to the same lower price I'd paid before ... and then gave a further discount since I was a repeat customer with a recent appraisal that just needed to be updated. He didn't even need to do a "drive-by", just research the latest comps from his office.

The lower fee was what I was charged. Sometimes, there's a lot of room in these "professional" fees. Don't hesitate to ask for a better deal ... after all, it's only money at stake ... yours.
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Old 09-14-2008, 11:21 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,103,707 times
Reputation: 1008
To clarify....

3rd party fees like title insurance, attorney fees, title exam, recording fees, stamps, etc are NOT NEGOTIABLE with the lender. You will need to go to the 3rd party DIRECTLY to negotiate THEIR fees.

If the appraiser's insurance found out that the appraiser did not go back to a property that was appraised over 6months ago, then they will more than likely revoke his E&O insurance. What if the home was torn apart? What if he received roof damage? fire damage?
What if the home is vacant?

Quote:
Originally Posted by sunsprit View Post
Again, I'll say BS on this point.

I've been down that road, too ... where a lender required an appraisal from their "short list" of "approved" appraisers in an area. I asked what the appraisal would cost from the lender, and they quoted a figure as the "standard" fee from the appraiser I had selected.

The lender was unaware that I'd previously had an appraisal done by that appraiser (for contested property tax assessment purposes) within a year, and I knew that I'd paid about half of what they were quoting me for the fee. I called the appraiser directly and asked him why the fee was now so high, and he adjusted his fee to the same lower price I'd paid before ... and then gave a further discount since I was a repeat customer with a recent appraisal that just needed to be updated. He didn't even need to do a "drive-by", just research the latest comps from his office.

The lower fee was what I was charged. Sometimes, there's a lot of room in these "professional" fees. Don't hesitate to ask for a better deal ... after all, it's only money at stake ... yours.
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Old 09-14-2008, 11:43 AM
 
Location: Fort Myers, FL
1,286 posts, read 2,596,336 times
Reputation: 249
Quote:
Originally Posted by sunsprit View Post
Comparing professional or talent services to a brokering of someone else's money for a fee is pure BS.

What do you think you pay a broker or lender for there services?

If there was a huge difference in the end result for the client obtaining the mortgage in interest rate, fees, and other costs as a result of paying a higher fee for the broker service, then you might have a point.

But that's rarely the case for a well qualified borrower.

You are wrong. There is a huge difference between someone with no experience and someone with a lot of experience.

Unless the broker with a higher compensation can show you that you'll be getting lower points, waived fees, and a lower interest rate due to his higher paid services ... there's no advantage to you to pay more for those services.

How do you know? What does any of that have to do with hiring a broker than can cater to a clients needs and goals?

It pays to shop your business around and don't hesitate to ask for a break on any aspect of the mortgage ... interest rate, points, and any other fees. Compare several quotes and calculate what will cost you the least in the term which you anticipate using the mortgage.
This is true. It may be beneficial if you are not happy or feel the broker/bank rep doesn't seem to be very informed or experienced. Perhaps the fee's seem high?

Quote:
Originally Posted by sunsprit View Post
Sorry, but you're still making apples and oranges comparisons about the cost and value of services here. A stock broker with a great track record is still no better for me than what he does now and into the unforseen future with my money. Just because they've done well for somebody else in the past doesn't mean that they will do as well for me into the future with my money at risk. This is purely a speculative investment made with my own funds.

A stock broker with a proven success rate DOES CHARGE MORE. Why? Because he makes you MORE money. He is a lot more experience than other brokers who don't have such a great return. You are correct in that it is speculative, but the risk is lower when you have a good broker who does his homework.

On the other hand, when I apply for a mortgage in today's marketplace, given my credit score, loan-to-value, assets, etc., I'm buying a financial product which is available in many forms from many sources with money to lend as their business. So, who's got the best deal for me? Will it be ... as you assert ... only an expensive broker who is the one who can access the best lenders and the best rates on my behalf? Isn't it also possible that another broker with a lower fee expectation and lower overhead operation might be just as professionally capable and can shop my loan with the same price point lenders? Especially if I'm a well qualified borrower seeking a realistic and affordable loan to value ratio for my property?

NO. The mortgage business works on VOLUME. There is also wholesale and correspondent lending, but that is beyond this conversation. The more volume you do in loans per month the better the rate you can off clients, usually, of course this is eventually capped too.

Why are you comparing 1 broker to another simply on the facility they work in? What if your cheap guy is terrible and can only afford that place? and what if your "expensive" broker is very good at what he does and closes 15-30 loans a month and can afford to be in a nicer office?

You can razzle-dazzle us about all of the potential problems that are averted solely by the seasoned high paid pro in the mortgage broker business, but this is the same BS that so many real estate agents use to baffle clients into thinking there's a lot of intrinsic professional value in the "services" they provide. Again, I'd say BS. For the most part, buying or selling real estate is a very simple transaction except for a very small percentage of "problem" properties where an agent or attorney might be of value to closing a deal.

Luckily you have never been a bad situation regarding real estate. Than can get pretty ugly. I assure there is much more needed for the "simple transaction" process. If it were so simple why does every state require a real estate agent to be licensed? Would you really work with a real estate agent that didn't even understand basic contract law? That "simple" piece of paper that states what your buying, who from whom, for how much/when, it is accepted and executed in a timely fashion. Not to mention the clauses that protect both the buyer and seller if certain aspects where to happen during the course of the contract period.

Also, as posted above by another ... there's no such thing as "hiding" the fees, the commissions, and the charges any longer in the residential lending business. Any lender who tries to "rip off" a client with inflated appraisals, inspection fees, doc fees, extra high points, origination fees, closing fees, credit report fees, process fees, mailing charges, certified fund check charges, etc etc etc ... the "nickle & dimeing" of clients that's been done for years by abusive lenders ... is going to be caught out by knowledgeable mortgage seekers who will know to ask about these proposed charges in a timely manner and take their business elsewhere to a more ethical and reputable lender.

While you are mostly correct. A BANK is allowed by law to charge there own fee's. They may only have paid an apprasier $250 to do an appraisal, but they have every right to charge you $500. The banks have a huge lobby. They get to hire unlicensed brokers to work for them. People who are on salary but get bonus based on volume. 90% of the time are NEVER cheaper.

A more reliable comparison of what folks are buying as a business model would be to compare purchasing hard goods. With a mortgage to be purchased, who can deliver it to the buyer at the lowest net cost in the short and long term?
You are not purchasing a hard good. You are entering a contract and receiving a service. This is not a camera or baseball. Is not already manufactured and ready to sell based on supply and demand.

Quote:
Originally Posted by sunsprit View Post
Now, I'm really baffled ... I responded to a quote from an entirely different poster and you come back with issues taken out of context from that exchange?

Response: Next line.

Read that as "inflated appraisal costs" such as were cited by the other poster, who claimed a bank could charge any amount they wanted for a appraisal while he, as a broker, could only pass through the actual charges ....

My point was, and remains ... that in using a broker to obtain a mortgage, you're purchasing a financial services product, not a speculative financial investment.

Banks CAN charge more for the same thing. You are paying for more than a service/product you are also paying an advisor for his advice.

As a small businessman, I appreciate overhead and expenses and costs to make my living. Some folks have fancy offices in prestige addresses to capture their clientele, some choose a more modest route. But when it comes to purchasing a mortgage, those fancy offices with the latte machine and the receptionist serving them in the wood paneled conference room doesn't buy me a better product for my money than the fellow with a more modest business operation. I've seen brokers operate out of their home based offices who could deliver the same product for less money than a fancy downtown operation and they had no less expertise and ability than the storefront operation.
How do you know what experience they have?

Quote:
Originally Posted by kinkytoes View Post
Yes, I think I am going to repeat what I wrote. Once you find a broker, you can negotiate for free points and discounts on any fees. To get a mortgage, I also recommend calling a reputable bank or credit union not a mortgage "broker." Aren't they the people who gave out all those Alt-A, ARM and subprime loans? I believe banks and credit unions also pay their brokers salaries, so who cares how much the broker makes in profit on your loan? Once you have a loan, a reputable lender and product you like, you can negotiate for free points and discounts on fees. You have a good downpayment, a nicely-priced house and good credit. Go for it!
NOTHING in life is free. The same goes for any broker or bank/union. You may negotiate all you want, unless you have millions in an account, banks DO NOT work with you and make special exceptions. In the end your still going to pay the same fee's one way or another.

The Alt-A, ARM and Subprime's were offered through banks. Broker's did not make these products. These products didnt cause they sitaution we are in. A small percentage of people who got them did.

Quote:
Originally Posted by sunsprit View Post
Again, I'll say BS on this point.

I've been down that road, too ... where a lender required an appraisal from their "short list" of "approved" appraisers in an area. I asked what the appraisal would cost from the lender, and they quoted a figure as the "standard" fee from the appraiser I had selected.

The lender was unaware that I'd previously had an appraisal done by that appraiser (for contested property tax assessment purposes) within a year, and I knew that I'd paid about half of what they were quoting me for the fee. I called the appraiser directly and asked him why the fee was now so high, and he adjusted his fee to the same lower price I'd paid before ... and then gave a further discount since I was a repeat customer with a recent appraisal that just needed to be updated. He didn't even need to do a "drive-by", just research the latest comps from his office.

This is one instance where you saved money. Just because you did it once, doesnt mean someone else can get a discounted appraisal. What you side steped was that you already paid the "regular fee" and now paid probably $50 for a re-issue to bring it current. All you had to do is tell the broker/banker about the previsous appraisal and they would have called them on your behalf, they would have gotten the same "discount".

The lower fee was what I was charged. Sometimes, there's a lot of room in these "professional" fees. Don't hesitate to ask for a better deal ... after all, it's only money at stake ... yours.
So what do you get for going to someone more experienced? Just because you have a great down payment and credit score doesnt mean you get the best rate.

How do you know what someones best rate is?

What if a 30 years is best? Or are you just assuming that a 30 year is best for everyone? How about a 40 year? What if his plan is only to live there for 1, 3, 5, 7, 10, 15 or <30 years? Why pay a higher interest rate for a longer term loan if you aren't going to be there? Or if they plan on taking money out in a few years to "leverage" thier cashflow? What if they are looking for the best way to minimize there monthly obligations? Or looking for a tax shelter? What if they want to make double payments? Do they know the benefits of making extra payments? What if they are self-employed? Should they escrow or not? Are discount points important? What advantages and disadvantages do they have?

There is a reason why brokers exist and why they compete with banks everyday. If banks were so respectful of there customers they wouldn't lose so many loans. They are higher priced, they advertise to there already large customer base. Send out an advertisement saying since your a preferred customer, special loan with this apr, if you qualify. A lot of people get these and think they are special and preferred, they don't get a better deal. The bank just preys on loyalty.

Like stated before, you get what you pay for, plain and simple.
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