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(And don't tell me there isn't one, when mortgage brokers start disclosing how much they get paid by each bank then I might think otherwise.)
Unless you are a dope, you know how the broker/lender relationships works, for the most part. Brokers don't make all their money by putting people into high rate mtg's, it's securing the mtg itself that brokers get paid for. Any borrower should understand that their mtg should not be impacted one bit by a broker's existence in the equation.
"Just go to the bank"...this is not plural. So if WaMu doesn't have the best rate for your particular financial situation, what else? Go visit 3 or 4 other banks? Perhaps. But a broker can access hundreds of banks and institutions, and you don't have to compromize your terms or fees. It's still up to you, the borrower, to make the decision to apply for a particular loan. You can always say no thank you if you aren't getting the service you want.
Unless you are a dope, you know how the broker/lender relationships works, for the most part. Brokers don't make all their money by putting people into high rate mtg's, it's securing the mtg itself that brokers get paid for. Any borrower should understand that their mtg should not be impacted one bit by a broker's existence in the equation.
"Just go to the bank"...this is not plural. So if WaMu doesn't have the best rate for your particular financial situation, what else? Go visit 3 or 4 other banks? Perhaps. But a broker can access hundreds of banks and institutions, and you don't have to compromize your terms or fees. It's still up to you, the borrower, to make the decision to apply for a particular loan. You can always say no thank you if you aren't getting the service you want.
I agree. It's about getting the best loan for you and banks don't always have it. Mortgage brokers can find loans that seem customized just for you and your situation. Banks want to you to form to their mold and not everyone can do that.
Monster Daddy -
You seem a little worked up over the broker issue, but what you and most people don't realize is that there is one way for you know exactly what the compensation of your lender is and that is by using a broker. So you shoud think twice.
Federal laws only require mortgage brokers to disclose the compensation that we receive from a lender, while a lender (mortgage bankers and banks) are not required to disclose to you the amount they receive when they sell the loan on the secondary market. Brokers receive wholesale pricing from lenders and banks that you as a borrower do not get when you go directly to them. The reason we get wholesale pricing is because the lender does not have to pay their internal loan officer a commission nor a processor or any of the other support staff that are involved in the loan origination process nor the marketing expense to get your loan in the first place. As a result they offer us lower rates and/or pay us a Service Release Premium so that we can either offer our borrowers a better rate if we charge an origination fee or they'll pay us if we don't charge you an origination fee. Only brokers disclose whether and how much we are paid by the lender, not banks or mortgage bankers.
Do you think that the loan officer, processor, bank manager at the bank don't get paid when they do your loan? The problem when you go to a bank is that nine times out of ten they will not have the best rate. They don't have to have the best rate to get your business. They count on your banking relationship to get your business and the fact that you don't know enough about the mortgage business to realize that the banks don't have the best rates. Also, your loan officer is usually not very experienced and doesn't have the product choice a broker does, so if you don't have a picture perfect situation you're certainly not getting the best loan you could.
Do you honestly think that the bank isn't making money from originating your loan? Do you think they only make money from the interest payments? While those fees are not being disclosed to you, as in a "no closing cost loan", you are paying it in the form of a higher rate. Washington Mutual especially is known for "portolio" lending - not selling the servicing of your loan and lending their depositor's money. However, the best interest rates are available when your loan is sold off through Fannie Mae and Freddie Mac. The majority of WAMU's loans are ARMs and mostly the terrible "Option ARM" that many people didn't know they had. Now these loans (which WAMU and others paid us brokers a lot of money to send them and stuck borrowers with prepayment penalties) are causing a huge problem in the mortgage industry. Side note: even though they regularly paid us 2 - 3% of the loan to do these loans - I've never recommended one to a client.
All WAMU's "pre-emptive strike" did was keep you from shopping with a broker and getting a better deal. As me a question and you'll get the honest answer, not some sales pitch like "I was in the demographic most likely to refinance". Seems like you must have had a bad experience with a broker, but don't assume that we're all bad. There's bad in every part of the business.
Federal laws only require mortgage brokers to disclose the compensation that we receive from a lender, while a lender (mortgage bankers and banks) are not required to disclose to you the amount they receive when they sell the loan on the secondary market. Brokers receive wholesale pricing from lenders and banks that you as a borrower do not get when you go directly to them.
GOTCHA! That was PURE bull**** and lies!!! Really brokers get the lowest rate??? Wholesale??? LOL, do you even know what that means? Is it any surprise that mortgage brokers are partly responsible for the housing mess?
Just go to .bankrate.com and you can find the lowest rate. Broker services not needed.
Banks are mortgage originators and the direct call/online departments DO NOT commission compensate ANYONE. No financial institution has a lower cost of funding than banks. You know all those checking deposits they have? Banks are paying close to about zero interest. Plus they can access the Fed discount rate, Fed Funds, or CDs.
Now the only other thing that can hold back a bank is high cost of overhead. So yeah some banks offer crappy rates. But those with online units are run just like other online companies without brick and mortar, low overhead and no sales force. So that's why walking into a branch for a loan is more expensive than going online. The smarter companies offer a discount for online customers.
6.13% APR when I pulled it today, that's about as good as many pure play online only mortgage companies. WellsFargo is about 6.274% APR.
Now what happens after a year when you have issues with your mortgage? Do you call this mortgage broker? Hell no, he won't want to have anything to do with you except want you to refinance. At least with WaMu you can walk into a branch and get some service. And they don't need to resell your mortgage like other cheap online entities.
Folks, save yourself some grief and go to .bankrate.com and check the ONLINE units of banks. It's not a lot of work and I'm sure you will find some very good rates. And remember to check the APR, not just the interest rate.
Why the hell would you people choose to go through a mortgage broker instead of just calling a bank??? Cut out the middle man completely and their conflicts of interest. (And don't tell me there isn't one, when mortgage brokers start disclosing how much they get paid by each bank then I might think otherwise.)
Lots of banks post their rates online so it's easy to check rates. And many like Washington Mutual (I know because I used them) have different tiers of rates, one for online inquiries and a higher one for mortgage brokers (to pay their fee of course!)
And Washington Mutual has kept my loan to this day. I even refinanced them twice to a lower rate at no credit check, discount points or fees other than paying title insurance/recording again. I asked them why they did it and their reasoning is I was in the demographic most likely to refinance so it was a preemptive strike. Hell, that kept my business.
I went through Bank of America direct the last time and have had pretty much the same experience. There has been no selling of servicing, no-hassle/paperwork refi's. My experience is that brokers are about 1/8 pt or maybe a little more lower than the banks retail outlets. But dealing with them, for me, has been like working with a used car salesman. Mortgage brokers are the sleazeballs of the real estate world. Maybe yours is honest and maybe he is not. I liked the predictable bank experience better.
Wow Monster Daddy you are really ignorant of the mortgage industry. If you've ever spent the time to research the topic you are discussing you would not make the ridiculous comments you've made:
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GOTCHA! That was PURE bull**** and lies!!! Really brokers get the lowest rate??? Wholesale??? LOL, do you even know what that means? Is it any surprise that mortgage brokers are partly responsible for the housing mess?
Instead of spouting off the vitriole you've shown take a few minutes and read an explanation of Yield Spread Premium (aka Service Release Premium) Yield Spread Premiums, learn what they are and how they can be used to your advantage (written by a goup I've never heard of and have no affiliation with) and you'll see -as I stated before - that only mortgage brokers, not banks or mortgage bankers, must disclose YSP or SRP. As you'll read in the article and I've stated before there is the opportunity for abuse of the YSP, but at the end of the day you're better off knowing about it than not knowing about it as you would with a bank. If you want to do some further research read RESPA and HUD's letters about YSP and you'll see that what I'm telling you is exactly the truth.
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Now the only other thing that can hold back a bank is high cost of overhead. So yeah some banks offer crappy rates.
Now there's a true statement!
Also, FYI if you read the footnote on the WAMU site you linked you'd see that the 6.0% rate (6.13% APR) includes a 1% origination fee. For that same scenario, I would only charge a 0.875% origination fee and you'd have a 6.093% APR because with the YSP I'd be able to pay for all of the fees other than the title company fees.
So, I guess my rates are better than any
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pure play online only mortgage companies
after all. One other true statement you made was to check the APR. That is the only way for you to know what your "true" cost is for the loan. As the story stated:
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So the moral of the story is, the bank is not offering a better deal. Find an ethical mortgage broker and keep him or her for life. You will not regret it.
You really should not try to make yourself out to be an informed person on the subject when in fact you're just angry and ignorant on the topic.
One last thing about bankrate.com - it is a site for companies to advertise their rates to get you to call. By the time you call, who knows where the rate will be. Of course, that is the same with anything and anybody. Back to my original point....you need to find someone you can trust, who answers all your questions, everything makes sense, and the come through with what they tell you. Then stick with them. The best way to find that is through a referral from someone you know that has had a good experience with a broker and trusts them enough to refer you to them.
We will be moving to the area soon and planning to buy a house. Can you tell me about your exeriences good and bad with the mortgage companies. We are trying to determine who is good, and who to avoid as well. We would also prefer to use a company that doesn't sell the mortgage to another company.
We currently use National City and have been happy with them, anyone have any experience with them in in AZ?
Thanks for your help!
You may email me if you wish and I will give you the contact information for the lender that I prefer. I don't want to advertise a company name on the forum.
It is a good idea to talk to several lenders to determine who to use. A good mortgage broker will work to get you the best rate, and provide individual service to you as well.
I send lots of clients to the lender that I use. She will work with those with bad credit and help them to get their credit up so they can qualify for a loan. It's a service they provide, with no obligation for the individual to get their loan through them.
LOL, that was a pathetic and patronizing response.
Guess you mortgage brokers have no blame whatsoever in the housing mess, none! See I used to work in investment banking M&A (i.e. the biggest snakes around) and brokers are just less intelligent wannabees.
I'm done with this thread. Folks, trusting a mortgage broker without checking bank rates is sheer folly. Replacing bank overhead with a broker commission is even money at best.
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