The Fed Rule - Big Deal or Not? 08.19.10
Today's Poll: Do you think Broker/Banker rules will line up to be pretty much equal?
Yes
No
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5pence: (August 21, 2010 8:35pm)
Really good article guys, if you're interested in another point of view : http://www.huffingtonpost.com/dean-baker/when-wall-street-rules-we_b_688866.html?utm_source=DailyBrief&utm_campaign=082010&utm_medium=email&utm_content=FeatureTitle
5pence: (August 20, 2010 4:40pm)
If you study up on Guilds you'd see how close they are to our goals. They're good enough for doctors, lawyers, realtors, accountants, actors and many others. As long as all the players (all appraisers) are not on the same playing field, the score gets tilted to the home teams advantage (the banksters) and the 1st team never get to play. We need a level playing field, but the banksters love their gluttony so much they can't share and the government won't make them play fair.
barryl: (August 20, 2010 3:12pm)
start your own management company, otherwize look for a new career! I would appraise glass diamonds!
W.R.Buchanan: (August 20, 2010 3:05pm)
5pence:I agree with the guild idea,I think it should be manditory as well and dictated by OREA as a requirement (fatchance) the problem is it sounds too much like a union. Unions have a bad name in CA and alot of other states. Unions are great for the worker bees, but they always end up pricing themselves out of a job. People don't mind paying for High Quality products, and for high quality workers to produce them, this is why high end German cars cost so much. German unions reward high skill level. Problem with US Unions is skill level does not dictate wages. As a result the highest skilled workers get the same money as idiots. So really there is no incentive to excel,in fact opposite true. This will be the primary hurdle we as appraisers will have to overcome.IE; Credibility.Theoretically the State Tests should have done this for us, but we all know that's not true. Weeding out the incompetants will be a long time coming and I see attrition as being the only way to handle this issue
barryl: (August 20, 2010 12:02pm)
your getting close, "cost to the rich", your absolutely on the right track. FNMA should only be a mechanism for wrapping, and not a funding source. fdic insured banks don't need fnma, when the secondary markets returs, which will be all private sector, not quasi...watch, the sure bet is, their will be an annual insurance policy needed for non fdic insured institutions, that will be cost prohibitive, and will make more sense for a banker to become a bank.
5pence: (August 20, 2010 11:41am)
"No progressive movement will make any progress until we understand the battle we are fighting. Our income is a cost to the rich. They will look to cut it wherever they can, whether this is wages for private sector workers, pensions for public employees, or Social Security for retirees. That is their target. We have to fight back using the same logic. Their income is our cost - the multimillion dollar bonuses for the Wall Street wizards is a direct drain on the economy. So are the bloated paychecks of top executives and their lackey boards. Progressives must be prepared to use all the same tactics to bring down the income of the rich & powerful that they have used to reduce the income of everyone else. We have to put the focus on the ways the rich have rigged the rules and place this at the center of political debate." YES!!http://www.huffingtonpost.com/dean-baker/when-wall-street-rules-we_b_688866.html?utm_source=DailyBrief&utm_campaign=082010&utm_medium=email&utm_content=FeatureTitle
barryl: (August 20, 2010 11:01am)
broker/banker/broker/banker.....srp/ysp/srp/ysp...take the sure bet... my money says, wholesale and correspondent lending channels will be reserved only for fdic insured institutions, as thats the way it was, once upon a time.
barryl: (August 20, 2010 11:01am)
broker/banker/broker/banker.....srp/ysp/srp/ysp...take the sure bet... my money says, wholesale and correspondent lending channels will be reserved only for fdic insured institutions, as thats the way it was, once upon a time.
barryl: (August 20, 2010 11:00am)
broker/banker/broker/banker.....srp/ysp/srp/ysp...take the sure bet... my money says, wholesale and correspondent lending channels will be reserved only for fdic insured institutions, as thats the way it was, once upon a time.
5pence: (August 20, 2010 10:59am)
Randy, I do like the billable hours thing. I know you guys are against a Guild for appraisers, but that is right up the Guilds alley. Most lawyers are basically in Guilds - anything with "Association" in it seems to be a Guild. American Medical Association. Association of Realtors. American Bar Association. How about American Appraisers Association. Minimum fees and billable hours, like lawyers - I do like that.
W.R.Buchanan: (August 20, 2010 9:56am)
I said think about how it CAN work" because it is easy to come up with reasons why it won't work. That's where WE're at right now. The "idea" is to spread the idea! "Reality" is defined as "what is agreed upon by many people" If most of us agree that this is the way we will do business then customers have no choice. I'd love to see you try to negotiate hourly rates with a lawyer or a CPA. HA! fat chance getting anywhere with that one. Reason? It is reasonable and customary for them to charge this way. Also they go down to 1/4 hour, and I was once charged $100 to talk to a lawyer for 15 minutes, and he did absolutely nothing for me! You guys can also help? join one of the statewide appraisal coalitions CCAP, OCAP,ICAP, DCAP. These appraiser coalitions are ADVOCACY ONLY groups. They are not offering classes, or other services . WE are going for congress' jugular, and we are having an affect! WWW.cacap.org we have links to all know coalitions on our site. Randy
W.R.Buchanan: (August 20, 2010 9:40am)
5pence, valuequest, We at CCAP are gathering info in CA for this up coming R&C fight. You can bet the banksters are going to be fighting this tooth and nail.Luckily CCAP has got the ear of some promentent Congressmen who are not really friends of the banks. We are collecting for CA but anything helps.You can go to our website next week and there will be a function to get on this survey. www.cacap.org Guys this is exactly whyI am pushing for Billable Hours. If were going to change the pay structure then we need to make it so the COLA raises are built in just like everybody else's is. 5P you said you were making $300 in 89, we were splitting $375 @60/40 in 92 and making more than we can make now. Remember these people don't run your business, they think they do, and so many have agreed with them they think it's carved in stone. If you don't agree Change to Billable Hours, if everybody gets on this bandwagon it would be SOP within 2 years. Think about how to make it work. Randy
GODLIKE: (August 19, 2010 9:21pm)
I've been having slow loading issues and everytime the display says it's stuck on - s7.addthis.com
5pence: (August 19, 2010 8:22pm)
Bono Vox Add in that when you've got a government that isn't into fair competition (TBTF's) then the chances are good, if you got enough money, your competition will be put out of business. Streamline and cost effective - inverted totalitarianism.
Bono Vox: (August 19, 2010 8:02pm)
GMeans, agree with what you're saying. Would add one more thing: At some point, at some size, a company realizes that the cheapest way to rub out the competition is no longer product development and productivity increases. The cheapest way to win becomes lobbying government to put the other guy out of business.
5pence: (August 19, 2010 5:40pm)
Valuequestor, that language is "fees shall exclude assignments ordered by known appraisal management companies". It's the fees that the AMC's are PAYING that are not allowed in any fee survey study. There is no mention of what the AMC's are GETTING for fees are not to be included. They are historical, typical & usual and all their websites call it the appraisal fee It's the same numbers on millions of HUD-1's. Whatever, we old-timers have records of fees going back 20 yrs or more in some cases. I was making $300 in 1989! And they want me to work for that now - HAAAH!! State boards or individuals could set up a 3rd party survey along the lines of the ALA Mode survey where the fees are verifiable by anyone. Thing is, with VA fees and ALA Mode fees, they were there before any thoughts of referencing by survey was brought up by Congress. They are there through just a matter of course-ALA Mode to prove the AMC's were liars. AMC fees to borrowers are historically documented, typical & usual.
[email protected]: (August 19, 2010 3:57pm)
If you cant compete effectively then simply changing the rules for your competition can create an artificial advantage. Not based on service or loan terms but through confusion and additional disclosures. The end result is the banks will charge higher rates and pay lower commissions(They are not going to pay anymore in commissions than they have too). Bank Loan Officers biggest competition may be the hoards of new Bank Loan Officers who are afraid to deal with broker regulations and are dependent on bank leads(Reduced territories and bank quotas). Brokers will simply have to be better sales people explaining that although the revenues seem higher than what the bank is disclosing the rates and out of pocket costs actually paid by borrower may be less. Banks win during refi and REO market. Brokers win in purchase market when real value and service come into play! 1 mans opinion!
Valuequestor: (August 19, 2010 3:31pm)
5pence: I understand your concern...they're big players, but the language of reform specificaly mentions excluding their data from the process. I know they'll try like hell to weasel into the calculations. Thats why I'm pushing for EVERY independent fee survey so that difference is going to be obvious. We could use a site or group to accept faxes of all independent appraisal offices PRE-MELTDOWN PRE-HVCC fee schedules. How about that for a credible survey. Terrence Kelly - Valuequestor
W.R.Buchanan: (August 19, 2010 2:44pm)
Divedude: no I have never been asked to do that. I can as we have another business (machineshop) and I am setup to do so. However I wouldn't be forwarding Jack to anyone else. Sounds like a kickback some how... I'm beating 2 drums right now, circumventing the reasonable and customary BS by getting everyone to switch to Billable Hours, and the licensing of EVERY GD person in the bank's loan departments, and I'm sorry guys, but the Mortgage Broker's personnel need to get licensed too. This industry is dirty,,period. In order to clean it up, everybody is going to have to take a big bite out of the sandwich. The principals of this industry (Wallstreet banks)almost killed this country with their bullshit greed. There is plenty of money for everyone, but only if you take some of it back from the crooks that stole it in the first place. They will still make more money than GOD, They just won't make every cent there is!!!!!!!!! Randy
AbleRonny: (August 19, 2010 2:29pm)
I don't know if anyone is still out there, but I have a comment. Colorado law requires that I, as an MLO for a mortgage banker, disclose to the borrower what I will make on each loan, even though it is not required to appear on the HUD-1. Colorado also has a lengthy and confusing net tangible benefit disclosure, AND UW's need to verify if indeed there is a benefit. A recent ARM loan I originated was scrutinized and required a copy of the note of the current loan in the file to prove it. Colorado is strict!
5pence: (August 19, 2010 1:31pm)
I meant numerous "AMC" websites - the usual suspects we've all grown to know and detest. I mean, why not? It's there in black and white, or whatever colors they want to use, for everyone to see. Everyone. Isn't that established fees? Isn't that usual and typical? Someone please prove to me it's not.
5pence: (August 19, 2010 1:28pm)
Valuequestor, considering that they're charging the borrower about $100-$200 over the usual appraiser fees, they can still get in the way and make some money. What I'd like to see, and this info you can find all over the net, is that the customary, typical and usual fees are what the AMC's are charging for the appraisal. That is historical and can be proven at numerous websites. I think it's time for a raise for us appraisers.
5pence: (August 19, 2010 1:24pm)
I'm not sure what your point is BobbyC, that you bowed down first and that maybe you're expecting some kind of applause for being one of the first ones to give in? Homey don't play that. We must all strive to make the world a better place - first and foremost.
Valuequestor: (August 19, 2010 12:49pm)
Frank & Brian: Can you guys continue to post the link for the Appraisal Fee Survey? Its not a perfect situation 5pence but its reality for now. If we show that fees paid to appraisers by AMCs are well under "reasonable and customary" it will make the business model for the banks a lot less attractive, no more windfall profit. All of us can participate in this survey, Mortgage Professionals, Realtors and Appraisers. Please check it out. Thanks!
BobbyC: (August 19, 2010 11:22am)
I moved over from a broker to a bank about 3 years ago and took a hit on my commission %. I saw the writing on the wall back in 07 and thought it was wise to be able to do more loans and make less per loan and also not have to show the YSP. You know what it was a wise move and I am glad I did it. For those of you who were not willing to make a move like that unfortunately you are suffering the consequences now. Life is not always fair as most of you know and things change constantly, but it is the way it is. The only fair thing in life goes to those who see the change coming and are willing to adjust accordingly. If your not stop complaining!
CSmith: (August 19, 2010 10:36am)
The Board proposed in comment 36(d)(2)-2 to clarify that yield spread premiums, even if disclosed as “credits” in accordance with HUD’s Regulation X, which implements RESPA, ***are not considered compensation received by the loan originator directly from the consumer for purposes of this rule.*** Under Regulation X, a yield spread premium paid by a creditor to the loan originator may be characterized on the RESPA disclosures as a “credit” that will be applied to reduce the consumer’s total settlement charges, including origination fees. A mortgage broker trade association opposed the clarification in proposed comment 36(d)(2)-2 and urged the Board to treat yield spread premiums as payments made directly from the consumer to the loan originator under Regulation Z. By contrast, as discussed above, consumer advocates and a federal banking agency urged the Board to adopt § 226.36(d)(2) as proposed. 63 The Board is adopting comment 36(d)(2)-2, as proposed.
CSmith: (August 19, 2010 10:32am)
The Board proposed in comment 36(d)(2)-2 to clarify that yield spread premiums, even if disclosed as “credits” in accordance with HUD’s Regulation X, which implements RESPA, are not considered compensation received by the loan originator directly from the consumer for purposes of this rule. Under Regulation X, a yield spread premium paid by a creditor to the loan originator may be characterized on the RESPA disclosures as a “credit” that will be applied to reduce the consumer’s total settlement charges, including origination fees. A mortgage broker trade association opposed the clarification in proposed comment 36(d)(2)-2 and urged the Board to treat yield spread premiums as payments made directly from the consumer to the loan originator under Regulation Z. By contrast, as discussed above, consumer advocates and a federal banking agency urged the Board to adopt § 226.36(d)(2) as proposed. The Board is adopting comment 36(d)(2)-2, as proposed.
5pence: (August 19, 2010 10:27am)
With your help, financial reform bill was signed into law-But does that mean the fight is over? Not a chance. Regulations, implementation & appointments will determine whether the promise of this legislation is fulfilled. Unless we stay involved, the TBTF banks will run this part of the show. We can’t stop paying attention & making noise now because: TBTF banks have hundreds of lawyers & lobbyists at work looking for ways to use the regulatory process to weaken the law. There will be less mainstream media attention on the issues, meaning we have to be especially vigilant. Regulators need to hear from the grassroots to do the right thing, and they need the spotlight of our attention to prevent sketchy backroom deals! We made huge progress, but we can’t give up now. Americans for Financial Reform seeks fairness, accountability & security. 2nd link is a petition for Liz Warren in as CFPB chief. http://capwiz.com/affil/taf/?alertid=15256046. capwiz.com/affil/issues/alert/?alertid=15256046
Divedude: (August 19, 2010 10:23am)
W.R. Buchanan: Have you ever been asked by an AMC to collect credit card information from the homeowner for your fee and send a portion to the AMC? I have been asked twice recently to do this for FHA appraisals. I don't and they get quite upset. I laugh to myself and save the documentation. I'd love to hang this AMC but the Massachusetts board tells me that the legal burden is on the AMC. I still bill them because something about it just stinks.
5pence: (August 19, 2010 10:04am)
We screwed ourselves by buying into that customary and reasonable crap. Now we and our fees are tied to those terms, forever. Idiots. I can never forgive appraisers for swallowing that hook, line & sinker in much the same way I can never forgive McCain for dragging straight out of hicksville Palin into the limelight. I've been an independent contractor most of my life and my fees were never the topic of discussion by anyone that used my services. I told them the fee and that was that. They could accept it or not. The hourly rate idea is the same thing, Randy. There's no way to accurately estimate the number of hours, but you can get close to give them some idea of the final cost. They never, ever told me the final cost. Congratulations all you appraisal mills churning out appraisers as fast as you could because they added $$$ to your bottom line. You've destroyed this profession with your greed. Banks need to be stopped-they are still ruining everything with their greedy slippery ways.
W.R.Buchanan: (August 19, 2010 9:35am)
If we charge them extra for everything, and make everything they do to us cost more, they will back off. They are doing what they are doing because there are too many places they can go for the product IE because they can!. When another 25% of the available appraisers fall off then things will start to go our way. We are already seeing this. Another way to affect change is to join an Advocacy Group like the CCAP California Coalition of Appraisal Professionals, www.cacap.org Join now we need your support to fight these guys on their home turf IE; Congress. Thanks Randy
W.R.Buchanan: (August 19, 2010 9:27am)
OWL: virtually every AMC other than the big 5-8 that are owned by the big banks, are owned by appraisers. Problem is the bigh banks control 90% of the work, so the other 10% is the available work pool, which all of the good guys are fighting over. We never get appraisals back for corrections from these guys. It's the idiots at the big AMC's we have problems with non stop. No licensing all these geeks is the definate solution to these problems. If they had to be licensed the banks would NOT hire them!! Because they would have to get them licensed and it would cost them more!!! Every problem we have as a group right now is being caused by banks trying to wring more profit out of the process. If wer make every problem trhy create cost them more than they will stop! simple as that. Hourly Rate, and Billable Hours is definately a viable solution. Lawyers, CPA's, Plumbers, Car Mechanics, all are compensated this way. WE have to change now!!! Randy
charity: (August 19, 2010 9:17am)
Just had a return client that went directly to her bank to refinance. They were going to charge her 2.25 pts for a rate that has a back end YSP on my rate sheet of almost 2.5-3%. Her net with me is No Points to her. Are the banks trying to make of for their losses by charging exorbitant fees??? I don't see their loan officers getting super rich.
W.R.Buchanan: (August 19, 2010 9:17am)
Here's another concept: License everybody at the bank and AMC who even touches a loan or an appraisal. I mean licensing test, license fees ($500+sounds good to start),continuing education, E&O ins, enforcement, penalties, revocation of license, all similar to what appraisers have to pay and endure. I am talking right down the line from the top underwriter to the little girl answering the phone. Incidentially, that little girl is usually the one asking for the illegal acts to be performed, because nobody can do anything to her. Yes,, I mean everybody at the Banks and AMCs, why should they be exempt, They are causing more problems daily, they definately need to be regulated by licensing. They need an "AMC Subcomittee" They need federally mandated rules like USPAP to govern what they can and cannot do. Let's make this business right! I have been advocating this very point for 4 years now, and time has come!!! Randy
Source1dan: (August 19, 2010 9:16am)
JOECLOSEIT,-- you do no more work than a broker when it comes to delivering a loan package to the end lender. As for the interest of carrying the loan -- your bank is making money on the spread between the note rate and the cost of funds for the bank - which is why your bank sits on the loan for thirty days before delivering it the the end lender just before the first payment is due, then the end lender pays your bank for the accumulated interest on the note for the thirty days your bank held it.
Owl Tree: (August 19, 2010 9:04am)
WR Buchanon.....what you guys need to do is form your own AMCs and then take this to the courts....if YOUR AMC abides by the appraisal rules, then loan originators should be able to use YOUR AMC when they have a loan that needs an appraisal. I've given up hope that I'll be able to order or talk to the direct appraiser ever again. My hope is that I can at least have the choice in using a GOOD AMC, which is staffed by friendly, knowledgeable people, and that ALL THE PROCEEDS go to the appraisers, who work as partners. The goal is to turn AMCs into professional partnerships, not the Nike sweatshops that are in place today. Good luck.
W.R.Buchanan: (August 19, 2010 9:04am)
Also, on a similar note,Why are banks dictating what they want on an appraisal now. The 1004 form is designed to be filled out and tell the whole story with a reasonable degree of completeness as it sits.Banks are now asking for more and more commentary, mainly to assist their incompetant X McDonalds employees. This commentary can only get you into trouble! I actually had one of these simps, actually tell me that they didn't care if I was an AR or not, she said, " an appraiser is an appraiser, and they (Corelogic ex Quantrix) were dictating what it wanted on a report now, and I could either supply that,or they would reassign the job."I said "don't call me again and I am reporting you to OREA", which I did! F%$^ these As$%^&s, WE as a group have got to start acting like we have a spine instead of cowtowing to IDIOTS.If you're not making enough on appraising, then get apart time job, so you don't have to compromise your integraty to eat. If we don't stand together, we fall Randy
Owl Tree: (August 19, 2010 8:56am)
If you look at the rule, the big question becomes: Can I charge $3000 per loan, and allow the customer to decide how much of a credit they receive to pay toward that $3000 based upon the rate?.....I'm asking this because of the following:..."Section 226.36(d)(1) does not limit a creditor’s ability to offer a higher interest rate in a transaction as a means for the consumer to 104 finance the payment of the loan originator’s compensation or other costs that the consumer would otherwise be required to pay directly (either in cash or out of the loan proceeds). Thus, a creditor may charge a higher interest rate to a consumer who will pay fewer of the costs of the transaction directly, or it may offer the consumer a lower rate if the consumer pays more of the costs directly." ....the rule seems to say I can't get borrower points and indirect compensation, but the clause above seems to open the door to increased credits based on changes in the rate.
Owl Tree: (August 19, 2010 8:51am)
The following are only illustrative examples of compensation methods that are permissible (unless otherwise prohibited by applicable law), and not an exhaustive list. Compensation is not based on the transaction’s terms or conditions if it is based on, for example: i. The loan originator’s overall loan volume (i.e., total dollar amount of credit extended or total number of loans originated), delivered to the creditor. ii. The long-term performance of the originator’s loans. iii. An hourly rate of pay to compensate the originator for the actual number of hours worked. iv. Whether the consumer is an existing customer of the creditor or a new customer. v. A payment that is fixed in advance for every loan the originator arranges for the creditor (e.g., $600 for every loan arranged for the creditor, or $1,000 for the first 1000 loans arranged and $500 for each additional loan arranged). vi. The percentage of applications submitted by the loan originator to the creditor that result in consummated transactions. vii. The quality of the loan originator’s loan files (e.g., accuracy and completeness of the loan documentation) submitted to the credit
W.R.Buchanan: (August 19, 2010 8:49am)
Guys: the discussion about appraiser fees yesterday wasn't done yet. Consider this: These YAPS have stolen so much money from us it is criminal. 5pences idea of picketing AMC local buildings is a good one, and national TV exposure would be even better as it would expose the banks greed on this. That tactic, along with an immediate shift thruout our industry to an hourly rate structure would bring us back into the game in a serious way. Guys we need to get this started NOW!!! Figure $75-100 per hour non negotiable, billed at delivery COD/net 10 pay requirement, a 1.5% per month penalty for non payment, and a national deadbeat hotline with the power to shut down an AMC for non payment of bills. Randy
Owl Tree: (August 19, 2010 8:47am)
Section 226.36(d)(1) does not limit a creditor’s ability to offer a higher interest rate in a transaction as a means for the consumer to 104 finance the payment of the loan originator’s compensation or other costs that the consumer would otherwise be required to pay directly (either in cash or out of the loan proceeds). Thus, a creditor may charge a higher interest rate to a consumer who will pay fewer of the costs of the transaction directly, or it may offer the consumer a lower rate if the consumer pays more of the costs directly. For example, if the consumer pays half of the transaction costs directly, a creditor may charge an interest rate of 6 percent but, if the consumer pays none of the transaction costs directly, the creditor may charge an interest rate of 6.5 percent.
Owl Tree: (August 19, 2010 8:45am)
For the meat and potatoes of the new compensation structure, go to page 103+. In short, I expect brokers to be much more aligned with two or three main lenders. The days of having a stable of a dozen or more lenders will likely be over, especially if compensation is ramped by monthly production. Also, there is a provision that allows lenders to pay a flat fee per unit, and/or a % of the loan amount....this is friendly to small loans. The NAMB issued a release praising the move. http://www.namb.org/namb/NewsBot.asp?MODE=VIEW&ID=284&SnID=432677057
Owl Tree: (August 19, 2010 8:41am)
Everyone is going on a Comp Plan...that's my initial take. The good news is that, finally, a loan officer at a bank and a loan officer at a broker are being recognized as performing the same role in the process, and being treated the same way (sort of). I've spoken with wholesalers who are already taking to the folks in DC about how they can compensate brokers properly.
GaryP: (August 19, 2010 7:58am)
I saw on another blog that an LO said that his correspondent lender said that they were just going to start paying a flat percentage on the back of the loan based on loan amount. That sounds to me like we're going to end up with a rate sheet with one rate on it and no flexibility in pricing rates. If that's the case, then this is obviously another example of a well intentioned regulation having negative, "unintended" consequences for the consumer. It's also going to lead to less competition among lenders, another negative for the consumer.
Correspondent GURU: (August 19, 2010 7:33am)
I have heard this argument... "The YSP is the borrower's, so don't worry". Be careful! The intent of the rule is entirely in favor of correspondent relationships and higher. The origin of the bill is prior to the establishment of RESPA. The DIRECTION of the bill is what is worrisome. NO EFFECT ON SRP.. 1403 (4)(B) No Provision for ‘‘limiting or affecting the amount of compensation received by a creditor upon the sale of a consummated loan to a subsequent purchaser;" Presentations on this have already begun as one such was presented by FAMP last week. “Originator compensation on a loan transaction must be entirely from the borrower or entirely from the lender (can’t be a mixture of the two)”. You want to be technical? Where did the YSP credit originally come from? That's right! The lender. I expect that credit will have to cover the cost of the loan. GOOD NEWS, there is more than a year to work out these arguments. Spend that time becoming a Correspondent Lender.
GODLIKE: (August 19, 2010 7:09am)
JOECLOSEIT: A rose by any other name . . . If it looks, like a duck, quacks like a duck . . .
TTinTx: (August 19, 2010 7:07am)
The SRP that I(my bank) receives is paid by the mortgage company I send the loan to. We take the initial risk upfront and do ALL the work. They get a clean file ready to book and begin earning money on. Why shouldn't we be compensated for that. Most community banks don't offer long term fixed rates, so we close them, ship them off, and receive SRP in exchange. I always credit any YSP back to the customer(don't have to, but do). Apparantly my customers like the rates I'm offering, I've been working 10-11 hours a day for several months now.
Joe Closeit: (August 19, 2010 6:37am)
SRP isn't exactly the same as YSP. Sometimes our SRP doesn't get funded for 30 days or more. Not to mention we don't have to sell for the SRP, we can hold the loan. Finally, as a bank we have to mark to market all loans funded on the books, not to mention the interest cost of holding the loan on the books. Whereas, YSP is a straight pass through of revenue, SRP is more expensive to utilize and the true net is never known up front. The lender has much more "skin in the game" on SRP. Maybe try to get the other side of the issue before just blasting the banks.
Noel Cookman: (August 19, 2010 6:27am)
True and beneficial reform will involve gathering all mortgage-related regulations under one roof; then, providing an ombudsmen-type oversight office (perhaps one that reports to the executive and another that reports to the legislative).
AustinLender: (August 19, 2010 6:26am)
the new rules says "Under the final rule, however, a loan originator may not receive compensation that is based on the interest rate or other loan terms. This will prevent loan originators from increasing their own compensation by raising the consumers' loan costs, such as by increasing the interest rate or points. Loan originators can continue to receive compensation that is based on a percentage of the loan amount, which is a common practice." which "to me" means that it doesn't matter if it's srp - ysp - whatever - they can only be paid based on the loan amount- (if they are employed by a "bank" or "Broker"
AustinLender: (August 19, 2010 6:22am)
guys the date is APRIL 1st....April fools day! not april 11th...missed on opportunity there!
Van: (August 19, 2010 6:15am)
YSP has been under attack every since at least 1998. If you didn't expect it...then you've had your head in the sand. Why do you think so many brokers jumped ship and went to the dark side and became associated with banks? They could rip people off there instead.
bigharrymortgage: (August 19, 2010 6:12am)
Good show...We drink rum in the Keys. It helps numb the pain and helps me think big (Big Harry Loans) in a small place with BIG LOANS.
jthedrummer: (August 19, 2010 6:01am)
Really Brian? Other agencies will either clarify or convolute the law? Has spending too much time in-front of the green screen given you a "weatherman" syndrome? I bet today is going to be either hotter or colder than normal...
BJFLMTG: (August 19, 2010 5:52am)
Love the shirt, glad you guys visited us in Florida, still going strong. Call the problem we have with regulation as Agency Arrogance. Each wishes to outdo the other, come up with the most restrictive plan to help the consumer, if we could just get the consumer to tell the Regulators to leave it alone, amazing what might happen.
panhandlenan: (August 19, 2010 4:56am)
The banks must have known this was coming. Even though it seems like they are making this up as they go along, this has been horribly orchestrated to say the least but the compensation factor has been orchestrated. My very dear friend that works for Regions Bank (dba mortgage) had to take a class on the new GFE and they are making their employees do the same disclosure that brokers do, ie: the credit for the ysp. I thought that really odd since they are a bank but it make perfect sense now. They changed that quite a few months ago.