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Words to the Wise About CFPB

JAN 3, 2013 4:20pm ET
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Comments (6)
If in sales, you have to make money, if working for a broker, you have to make enough for them and you, as long as there is a yield spread, customers will get the short end of the stick. If your secondary market needs to make money, LO's will never get FNMA/FHLMC true pricing.
Posted by | Friday, January 04 2013 at 2:24PM ET
jomama, What are you saying? It does not matter if you work for a broker or a bank there is YSP in a sense. The bank prices their loans with their intended yield and then turn around and sell the loan making more money on it that is not disclosed to the consumer. Brokers on the other hand disclose ALL the money they earn to consumers. Brokers disclose way more info than banks to consumers, which confuses them more. I'm not sure if you are saying consumers get the short end of the stick working with brokers, but you could not be more wrong if that is the case. I am a broker and I beat bank rates all the time and provide superior service as well.
Posted by | Monday, January 07 2013 at 1:04PM ET
If you are the principal and do not have to share the money you make on a loan that is great, if I am an LO that works for you, I have to make more on a loan because of the split. "just saying"
Posted by | Monday, January 07 2013 at 2:04PM ET
Deutsche Bank sold alot of whole sale loans in foreclosure loans. Some belonging to Washington Mutual that were sold when they had no legal rights to them. Now ArchBay Capital and York Capital have them in securities and under mers as well. Can't look them up under hedge fund protection, so who saves the home owners from these vultures? None have seen to make an effort to check into these. Wheres the help concerning these vultures?
Posted by | Monday, January 07 2013 at 2:05PM ET
Jomama-- Are you attempting to be a bureaucrat? As we know the bureaucrats have no concept of the November 2, 1992 HUD Rule requiring Mortgage Brokers place on the GFE the SRP/YSP. The exempted Mortgage Banks & Banks from disclosing SRP/YSP.

The Federal Trade Commission issued studies in 2002 & 2004 (www.ftc.gov/os/2004/01/030123mortgagetextofrpt.pdf) stating that disclosure of SRP/YSP put the consumer at a disadvantage when shopping for a loan as they had a bias of believing a loan with lower cost offered by a Mortgage Broker was higher than a higher cost loan offered by Mortgage Bank or Bank with no SRP/YSP disclosed. Their 2004 Executive Summary indicated that SRP/YSP should not be disclosed. The report indicated the consumer needed to know the cost & terms they were being charged, not what the value of the loan in the secondary market as each investor had their own valuation for the same loan.

To respond to your deficit of understanding SRP/YSP. A consumer needs to know the cost at closing and the terms of the loan, not SRP/YSP. Your logic of covering cost, requires the originating entity to cover their cost including LO compensation. FYI, Mortgage Banks, Banks, and Mortgage Brokerages have to pay their staff which includes LO's and cover all other expenses. Please explain your logic of an LO employed by a Mortgage Brokerage versus Mortgage Bank or Bank.
Posted by | Monday, January 14 2013 at 8:37PM ET
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