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- Joe Cafiero, "Joe Cafiero"
- Contributions:3220
BJ....Without knowing the details of the loan a 3% broker fee seems very high. That being said if they are a direct lender then there should be no broker fee becasue they are not a broker. My suggestion to you would be to place a quote request on here and see what comes back. I would guess that you will receive some pretty competitive offers that you may want to consider.
When you are working with a broker, your loan application will be submitted to a Lender. Not only is the broker required to provide disclosures, but so is the Lender. In this case, you can ignor the GFE from the Lender and go with the one from the broker.
bjslalaland - Let me first start with this description of the difference between a Mortgage Banker and a Broker.
"Just to make it clear, EVERYONE is a middleman, both the broker and the banker because noone is getting the loan directly from Wall Street or the insurance company they both sell the loans to.
Mortgage Brokers get themselves set up to represent multiple banks and investors and find your loan for you, process it and then use the money from the lender they are selling the loan to to fund the loan.
Mortgage Bankers get themselves set up to represent several investors and banks too but when they go to fund the loan they use a their line of credit to fund the loan, THEN sell it to the same place the broker is going sell it to.
The end result is the same, both charge the same basic fees most of the time, but because the broker is using someone elses money to fund the loan, they are required to disclose their profit. A mortgage bank does not.
The big advantage a mortgage bank has is that they control the entire transaction. The pricing is about the same for both. "
Hopefully this helps.
- Andrew Adams, "203K Specialist"
- Contributions:9349
Lew,
I would have to disagree on which GFE to pay attention too. Since the loan is being brokered to the lender I would rely on the lender's disclosure since they are the ones preparing the closing package. If the lender has it wrong the closing docs will be wrong. Could be a mistake but I would be wanting to know why it's different.
I would have to disagree on which GFE to pay attention too. Since the loan is being brokered to the lender I would rely on the lender's disclosure since they are the ones preparing the closing package. If the lender has it wrong the closing docs will be wrong. Could be a mistake but I would be wanting to know why it's different.
- George DeVine, "George DeVine"
- Contributions:857
AA,
As Lew stated, the lender sends what is essentially duplicate disclosures to the borrower. The GFE is almost always inaccurrate. The broker is dictating what fees that want to charge. The lender is only giving an estimate. I cannot speak directly to the 3% broker fee. This may be accurate given that the lender does control the broker compensation, but again, the broker may be using some of that compensation to pay closing costs, etc. If the broker is trustworthy, I would be comfortable with their estimate. My advise is to call your broker and review it with them.
- George DeVine, "George DeVine"
- Contributions:857
On another note, would any of you appreciate working hard to gain a client, give them a good deal, only to have another broker half way accross the country who only has a snapshot of what is going on, encourage the customer to shop around via the ZMM? I have read so many posts that state "post a request..." Do anyone of you consider that there is a loan officer out there who may have worked their azz off gaining the client?
Please don't refute my argument with an example of a customer who is getting hosed. I am referring to posts such as this one where there is insufficient evidence to determine how competitive the deal is. Now if we ask and find out that the customer is getting 6.75% with one point, I fully encourage suggesting that they post a request, but that advise should include speaking with their loan officer, as well.
- shapiroamg
- Contributions:3058
Good Point George. Re-reading the original post. It appears that the broker did not disclose the YSP on his/her initial GFE. The lender gets the loan submission and has to do the fed/state disclosures and adds the Broker Compensation on their GFE (and TiL perhaps).
We disclose a max 3% comp no matter what the YSP. I would assume the same is being done here, but ya neva know...
gdevine and Shapiroamg - Your points are well taken. I did view the prior discussion history for bjslalaland here: http://www.zillow.com/forum/site/ViewThread.htm?tid=42167
My suspission was that he had already made a request here and is comparing those quotes. If he had then the commenters here we could have viewed his request and also the quotes. For me that would have been much better than as you say a snapshot.
- Martin Wareing, "Martin Wareing"
- Contributions:3772
I have seen WHOLESALE LENDERS send out very generic and "all-encompassing" Good Faiths as they are required to send out something as well within 3 days of receipt of an application. They are usually inaccurate compared to the Broker's Good Faith as they do not transfer the numbers from the Broker's Good Faith into their system. They have a "template" of sorts that cranks them out. The mortgage broker's Good Faith is the one to follow and compare. When speaking with your Broker, he should be very well aware of this as it happens to me with the AmTrusts and the EverBanks of the world with every loan submission. Should be no worries.
I agree with Shap here- in the broker days, we would put a line on the GFE reading MAX YIELD TO BROKER 3%.
I HOPE that is what is going on, and the broker isn;t actually pocketing 3%... but unless it's in the 'mortgage broker fee' field, bj should be good to go.
- Chris Corica, "Chris Corica"
- Contributions:1075
bjs - have you asked your broker this question? There may be a simple explanation which they could answer best. If it is accurate and your broker is charging 3% then at that point you make a decission to either move forward or find someone else.
Because I like examples, Does anyone have problems with this Analogy:
Consider you are buying some produce. You pick which one. Today, I will use Corn because it is in season. As a consumer, you compare the prices from a few Grocery Stores (Banks) and Produce Stands (Brokers). Now we know corn is grown by Farmers (Wall Street, FannieMae, FreddieMac). As a consumer does it really matter how much profit the Grocery or Produce Stand makes? Provided the Corn is all fresh and comparable the consumer merely needs to look at their cost and convenience. The only difference may be that the Grocery (Bank) buys from only one farmer. The Produce Stand (Broker) shops around and finds the best price and quality to offer to its customers. With this said, I do believe that the Produce Stand (Broker) can offer the better price and therefore be the best choice for the consumer. Also, the Produce Stand (Broker) is very interested in its reputation. Shopping at the Local Grocery (Bank) is convenience shopping, and we do know that if you do that you can end up paying a higher price for convenience.
oh my, just re-read... 3% is actually IN the mortgage broker fee box? Then that isn't even lender compensation..... hmmmm... very interesting BJ, let us know what your LO says.
- Michael Mazursky, "FHA Mortgage"
- Contributions:314
Most lenders can still broker loans. A correspondent can use their warehouse line to fund the loan as a lender and broker loans to another lender if they don't want to take the risk or maybe they do not have enough room on their warehouse line. It's also possible a correspondent may not offer that particular product as a lender but as a broker they can close it with someone else.
- Tammy Stockdale, "Colorado Mtg Broker"
- Contributions:6995
BJ your getting alot of insightful posts here, I'd like to contribute, but it's been pretty well covered here. One question no one seemed to ask is whether or not you have spoken to your broker and received clairification from them as to the discrepency.
- John Paunan, "John Paunan"
- Contributions:1145
I agree with Velma and AA,
The broker fee needs some splainin' if it's not on the broker's GFE. This is not to say that the broker is doing something funny because Martin is also right. Lenders are not necessarily the most accurate when they send out their disclosures either. I've had a couple lenders send out grossly inaccurate GFEs (maybe their own processor or account managers fat fingered their GFE), which caused a problem with the client. I had to raise holy hell in one instance to get the lender to inform my client that I wasn't playing games. Certainly makes it hard to foster trust if the numbers don't match up.
- Mortgage Masters
- Contributions:182
Tim, I think your latest post is very much in line with most of us wanting ZMM to serve as a unique place for borrowers to get information and help understanding a very important tool that affects all homebuyers lives. This is a lot more productive for all of us. We have a very good collection of talented mortgage professionals that can do more, like your post, to bring home to borrowers what, exactly, is going on. Unfortunately, the majority of the borrowers are bombarded with advertising meant to mislead. Look at the Lending Tree ad that currently resides at the bottom of this page. It misleads by not telling borrowers that this is a lead service and not a lender. it doesn't mention that if they get your information you will be contacted by (how many different lenders?) anyone willing to pay Lending Tree for your info.
In addition they do not comply with Reg Z "trigger term rules" though they may not need to since they are not a lender. (I always thought if you mentioned a monthly payment that was a trigger term. ) Fixed Rate for life??? Totally misleading and a pure nonsense line cooked up to lure borrowers into thinking a good deal awaits. If you click on the ad , guess what- a way above market offering of 6.375% with 1 point and $500 closing costs. Note to Borrowers: I bet your final closing costs are going to be way above this amount. Bottom line - if you want clarity, help and information you can compare here USE Zillow with no tricks and no unending phone calls from lenders who pay for your information ( I'm suspect some resell that info also-thereby compounding the number of calls). Dave
Masters - Thank you. Just supprised no one has said my analogy was TOO CORNEY
Regarding the Ads here on Zillow, I do respect that they have to make money also. And they do sell that ad space. Hopefully the quality of posts, articles and information will educate consumers. It does sound like that is your intent, It is mine. I believe we all know that if we give, we will recieve as well. Not at all times, but in the end that statement comes true.
- Nic Netherton, "Colorado Lender"
- Contributions:7219
It was too Corny.
Lender, I did actually find your analogy to be too corny. I actually would have liked to have seen the 'Stand' be the bank and the 'Grocery Store' be the broker. That, to me, would have really driven the point home. Stands oftentimes get their produce from only one farm, GROCERY STORES have their produce trucked in from many. You see, it's a vastly different scenario when you turn it on it's head like that.
- Greg Darlin, "Greg Darlin"
- Contributions:3238
I prefer widgets and gadgets compared corn. Corn doesn't digest and I just can't grasp it like a widget.
- Ken Kopper
- Contributions:1578
Greg, it sounds to me like you have a dislike of corn due to the fact that if you have corn for dinner you see it again in the morning after a strong cup of coffee?
- John Paunan, "John Paunan"
- Contributions:1145
Greg, we don't need to hear about your grasping widgets.
Good point Velma - All depend on how you continue the description. From your prespective Instead of just offering one option, the Grocery presents many different brands not just ONE AND ONLY ONE OPTION. Depending on the description, either analogy would work. The important thing is that consumers understand the difference and make informed choices.
- Greg Darlin, "Greg Darlin"
- Contributions:3238
It's just something I don't like putting my hand around. I can fathom a widget and gadget much better. Maybe Tim is used to putting his hand around corn and analyzing it. But, I just can't picture corn . . .
- Greg Darlin, "Greg Darlin"
- Contributions:3238
Good point, JP. Thumbs up! Please comment more so I can try to work this thread out and see if I can get a plug or two in there. Ummmmmm. Bankers, Lenders and Brokers----corn, stands, grocery stores etc. What the heck? I got 5.250 on a 30 year fixed :-)
- Tammy Stockdale, "Colorado Mtg Broker"
- Contributions:6995
We are not in Kansas Tim, and we are not grocery shopping. Could you please spare us from another corn, or food, anaolgy please?
Yikes Greg, horrible vision I just had.
- Ken Kopper
- Contributions:1578
Velma, but grocery stores also present long lines and a lack of personal service whereas the produce stand allows for personal interaction and a service oriented atmosphere.
We could have fun with the Cornyness of my analogy all day. I set myself up for it by mistake and then realized the opportunity ( being how stuffy I can be) I figured what the heck. Show consumers we are real people. If everyone does not mind, will put on my starched shirt. Hopefully this consumer or others have been educated and informed with a great discussion thread. With respect, Lets get back to that.
Broker's GFE and Lender's GFE
One of the item is the Mortgage Broker Fee which is 3% of my loan amount. It is on the lender's GFE, but I've never see that from my broker's GFEs.
Which one shall I trust? How can those be different?
Thanks!
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