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We spoke with our LO. She said we have to make 6 payments, spaced one month apart starting when first is due. She said it was fine to make a $400K payment up front but just have to continue making payments at the minimum of the payment amount due. So that’s what we will do.
We spoke with our LO. She said we have to make 6 payments, spaced one month apart starting when first is due. She said it was fine to make a $400K payment up front but just have to continue making payments at the minimum of the payment amount due. So that’s what we will do.
We spoke with our LO. She said we have to make 6 payments, spaced one month apart starting when first is due. She said it was fine to make a $400K payment up front but just have to continue making payments at the minimum of the payment amount due. So that’s what we will do.
A man of his word = integrity!
Good for you, WorldKlas. Win, win.
Why a commission has to be reimbursed by the lender and loan officer within six months is an arbitrary rule that needs to be changed.
Why not 60 or 90 days?
Why not give back 25 or 50-percent of the commission?
What other professional service has a penalty of 100% refund if the actual service is cancelled or repaid within six months? I can't think of any.
Realtors sell a home and that same home can be sold again within 10 days by the same realtor or same office, and again flipped to another person in 10-30 days.
Why should the realtor keep their full commissions?
Should the Title insurance or Settlement closing agent refund their fee too if they sell the same house 2 times in 6 months?
I understand these are upfront fees and not given back but lender paid comp rules need a better outcome for early payoffs or some loan officers will go the borrower paid route.
I refinanced twice this year. Neither broker mentioned anything about having to return their commissions if loan was terminated before 6 months. I did call the first broker when rates fell 2 months after closing to see if he could help with another refinance and he said not yet, go to another broker if you want to refinance again now.
Why a commission has to be reimbursed by the lender and loan officer within six months is an arbitrary rule that needs to be changed.
Why not 60 or 90 days?
Why not give back 25 or 50-percent of the commission?
What other professional service has a penalty of 100% refund if the actual service is cancelled or repaid within six months? I can't think of any.
Realtors sell a home and that same home can be sold again within 10 days by the same realtor or same office, and again flipped to another person in 10-30 days.
Why should the realtor keep their full commissions?
Should the Title insurance or Settlement closing agent refund their fee too if they sell the same house 2 times in 6 months?
I understand these are upfront fees and not given back but lender paid comp rules need a better outcome for early payoffs or some loan officers will go the borrower paid route.
The value of the loan, what everyone is selling is the servicing on the loan. Whoever is collecting payments makes monthly income off of collecting those payments. The loan officer is compensated assuming the loan will be on the books for a minimum period (that is well over a year). Each loan costs the lender to close the loan - processing, UW, closers, shippers, other staff in addition to the LO. The break even point is tyically well beyond 6 months. That is one model.
The other is local broker shop originates and sells the loan to Wells Fargo. The broker was paid based on a loan that would be on the books for at least X years. So let's say the broker's office was paid 3 points for delivering a loan to another bank. It may actually be 36 months (or more) before the lender breaks even.
The 6 month commission payback penalty is not meant to fully compensate for an early payoff. But what it does do is alert originators and banks to not use mortgage loans as a bridge loan or other short term solution.
This is explanation simplified and there's long and complicated math equations involving the yield on each loan that make my eyes glaze over.
We don’t want to harm a person. We try to be honorable.
Pay it off in 10 years. That way you won't strip his commission off completely. Honorable thing to do.
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