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Until / unless some major change happens in the structure of Fannie Mae & Freddie Mac and the secondary mortgage market there is little reason for any lender to hold loans in their own portfolio. Thus every loan originator will almost certainly be dealing with the same basic wholesale rate and the tiny differences in fees that account for the overhead of "keeping the lights and answering the phones" is the only real difference...
Typically, a credit union will offer only conventional loans, and a little more stringent on down payment and underwriting requirements. Mortgage brokers on the other hand not only have more products to offer you, such as FHA, VA, TXVET, USDA, but they work with a number of lenders that can offer better rates. Also, if a Borrower is denied by the credit union, there are no other options for that Borrower. Whereas, the broker can re-work the loan and send it to another lender that will see and underwrite the loan differently and may approve it.
With all of that said, on April 1, 2011, this may be mute point. The Federal Reserve Board has put into law the Loan Orignator Compensation Plan, that may make getting a loan more expensive and cumbersome for the consumer. This will lessen competition for mortgages and may see a hike in interest rate as a result.
Talk to a mortgage professional that can help you with this and understands this firsthand.
destiny826,
With all of that said, on April 1, 2011, this may be mute point. The Federal Reserve Board has put into law the Loan Orignator Compensation Plan, that may make getting a loan more expensive and cumbersome for the consumer. This will lessen competition for mortgages and may see a hike in interest rate as a result.
Actually, it will have the opposite impact. The terms and conditions of the loan will still be subject to negotiation (subject to market conditions) but compensation based on terms and conditions will be prohibited.
Basically, originators will no longer be able to steer consumers to less desirable loans to receive increased compensation. They can be compensated however for loan "volume" which is an incentive to make more loans, that, in and of itself will increase competition.
This might actually streamline the loan process somewhat.
Actually, it will have the opposite impact. The terms and conditions of the loan will still be subject to negotiation (subject to market conditions) but compensation based on terms and conditions will be prohibited.
Basically, originators will no longer be able to steer consumers to less desirable loans to receive increased compensation. They can be compensated however for loan "volume" which is an incentive to make more loans, that, in and of itself will increase competition.
This might actually streamline the loan process somewhat.
I like your optimism, but the new regulation starting will increase consumer costs. Just like HVCC increased the cost of appraisals, this new regualation will increase cost to the consumer.
Can you provide any new regulation that has been helpful to the consumer?
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