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I sure hope that law doesnot pass. They cannot blame the subprime meltdown on mortgage brokers. If was the banks that funded the loans. All mortgage brokers are is matchmakers, bringing borrowers and lenders together. I dont see how cutting out the mortgage broker will make things better for the mortgage industry, if anything it will be harder for borrowers to determine what options are available.
Thomas
http://www.FHAmortgagePrograms.com
Hi Tom.
Common sense is irrelivant in this case. Legislators are being pressured to make it EASIER for banks, and one way to do this is BULLY mortgage brokers out of business.
We all know the tried and true argument.
7% mortgage pays 3yield spread to broker thus borrower is 'ripped off' .
7% mortgage from a 'direct lender' to the exact same customer means no disclosure thus the customer isnt getting 'ripped off'.
There is no point in arguing. Even if the legislation gets shoved thru usiing much bribe money, some lawyer will challenge it in supreme court as a form of racketerring and monopolizing. It will never last.
Its a retarded
I've been in the Savings & Loan business all my life. I'm not incented to sell one product over another, whether it makes sense for the client or not. If I upcharge a rate or upcharge a fee, I receive no benefit, so what's the point in doing it? I've seen many people get loans through brokers that I would have never in a million years put on my books. It's not the broker's fault, nor is it a crime, for hooking a client up with a DU or LP approved loan. The problem lies in the fact that that product was available to begin with. It's not the shoe salesman's fault that the shoes fell apart in 6 months, it's the fact that they were available to sell to begin with. My institution has been in business for over 100 years and we've never had a foreclosure. It's really not hard to do if you look at credit, income and the borrower's ability to repay. Back in the mid 80's, we wouldn't approve an ARM unless we could determine that the borrower's income had nowhere to go but up and could afford any future adjustments and we NEVER qualified anyone on the initial rate. Makes sense if you think about it.
Seems like there is always something coming at us.. the sun will come up tommorrow....
Getting rid of brokers is the goal.
I am a huge proponent of creating a licensing standard and some barriers to entry. Admit it, every kid looking to make a quick buck was a mortgage broker in 2004-2005. The bad news is that business has slowed and many homeowners are in inappropriate loans. The good news is that uneducated loan hacks are all jumping ship to make room for the professionals who really do care about making sure that their clients are being properly advised and getting a fair deal.
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That's good webstuff
I guess we need Federal Driver's Licenses too. Because, every 16 year old......
The simple fact is that someone needs to be blamed for the sub prime & banking mess and brokers are an easy target since so many inexperienced and unqualified people entered the business over the past several years.
From personal experience, I beleive that brokers need to take the blame for some of the problems that have happened. BUT, brokers are not the sole cause of all the woes related to the current housing mess.
Blame also needs to be shared with:
- Investors, Wall Street & Lenders for lack of sensible underwriting
- State & Federal Regulators for not enforcing existing laws
- Realtors & Appraisers
- Speculative investors & unsavvy home buyers
- The former Administration for repealing the Glass-Steagall Act
Simply put, everyone from the homes buyers to the end investors purchasing collaterized debt obligations to the President. Adding my rules & regulations against brokers is not going to fix anything especially if those as well as new laws are simply not going to be enforced.
The issue is one of disclosure and agency. As a Broker I act as an agent and a fiduciary for my clients. They recieve full disclosure and all fees are agreed to in advance costs transparent and accounted for.
The "mortgage banking" industry has used non-disclosure of fees and no liscencing requirements as their main vehicle for growth. Removing the full range of financing options from my clients and rewarwding an industry that has openly incouraged secret profits seems insane to me -Jay
Lender rating
Since January 2009
Licensing is a Joke! How tough would it be to get licensed....please!
All that will do is give loan officers/ brokers a way to earn instant credibility. All these changes are about grabbing headlines and not resolving the problem. How tough would it be to identify the problem brokers/lenders. Loan goes to forclosure Identify the Loan originator and the company. same LO and Company keep showing up you got a bad apple. The sub prime crash is all about bad loans. Why not identify who originated them?
Good points and questions Salem.....
lol @ Salem.
Mortgage brokers do not lend money. Lenders do. Lenders came up with the idiot programs. Brokers did not.
Retail loan officers working for lenders sold the exact same idiot loans as brokers.
Neve mind the BULL. Brokers nor retail loan guys are to blame. Its the lenders who approved the loans.
Theres alot of jokes going around like Info.... Brokers didnt make the idiot programs but they sure did push/sell them.
If the broker knew he was pushing the wrong loan on the wrong client then they too are to blame. The Banks are/were the enablers.
The sad truth is that most brokers really had no clue of the damage they were doing. They didn't/don't know how a neg am works, what recasting is, when it will occur,etc. They were relying on the information being given to them by their managers who were loving the 2 on the front, 3 on the back deals.
Never before has hindsight be so crystal clear. What were they thinking?
Yahoo Corona Nick.
The 'anonymous homeowner' who DOESNT work in the industry right? The guy who poses as a homeowner with a 4.75% mortgage and asks if he should refinance.
There is no difference between a mortgage broker and a retail loan officer working for a bank. In fact, the biggest offender of them ALL , was AMERIQUEST (Countyrwides role model) who sold loans as direct lenders to the public.
They were sued by all 48 states. Remember Nick ?
Oh i forgot. You are still posing as an 'anonymous homeowner' .
Salem if all states followed California's requirements liscencing would not be a joke.
Unfortunately retail bank clerks earning the same pay as fast food workers already have the public assuming that they are experts.
Great point about tracking bad loans based upon originator.
Again I want to restate my point that the "net branch" explosion has allowed for instant acess to multiple state lending, real estate laws vary greatly by state, as well as incouraged "secret profits"
This diversionary technique of persecuting brokers is a desperate attempt to elude the truth. Regulators of the banking industry must focus on these flimsy net branch model's.
You have no idea how many people are switching to a correspondant angle. No disclosure on YSP etc.........
You dont need to work as a retail loan officer with a clip on tie for a bank to catch the breaks.
In fact. Wells fargo has even gone a step further. Its called 'broker compensation' .
They guarantee 1.5% on conforming loans and 2% on goverment loans, regardless of the note rate and is not up for negotiation. Wells of course built the fees into their 'retail rate' that the borrower has no say in nor has anything to do with the broker.
Now you need a NEW set of BRIBE money to somehow get rid of this angle using paid off legislators. Good luck .
Info, I dont recall, but for you to think Im in the business, is a compliment, though I am not.
Bull. Get lost troll.
HA! Lame!
Brokers are to blame, they are worse than RE agents.
Lender rating
Since January 2009
He's not in the business, his relatives or some $hit are...they apparently live with him now so he enjoys spending all day on here venting his frustrations.......He really knows no more about our biz than what he can read on msnmoney or overhear somewhere else. Therefore no need to get into an arguement with him.....just let it go.
Lender rating
Since January 2009
Why have a moniker "infoseeking" when you already know it all?
It's the old argument that guns don't kill people, people kill people. The lenders may have offered the programs but the brokers and loan originators mis used them.
"The sad truth is that most brokers really had no clue of the damage they were doing. They didn't/don't know how a neg am works, what recasting is, when it will occur,etc. They were relying on the information being given to them by their managers who were loving the 2 on the front, 3 on the back deals."
Even though they had no idea how they really worked they still sold them to whoever would buy it.
Thank you nic for letting info know I am not in "in the business" of stealing people's money.
Salem.
So did you, and everyone else who could. Its pretty standard for a salesman to sell what he is told he can sell. They dont make the rules, approve the loans, nor assign the risks.
You are the guy who would produce drugs(lender) , and blame your sellers (loan officers) for getting people addicted. The supplier isnt the key ?
Spoken like a true........whatever ........
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Fed Proposed Changes to Mortgage Broker Compensation
Brian Brady
Solana Beach, CA
Mortgage Lender
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While I'm no fan of government meddling in the loan origination process, I can find no fault in the Federal Reserve's recent proposal to define the role of a mortgage broker and to regulate lending. Those who know me know that I'm a known Fed-phile; I sincerely believe that they are the most appropriate body, within the government, to establish rules and guidelines for lending.
The full, 41-page text of the proposal is here.
Any thoughts?
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