Things we need to know to deliver an Accurate Quote

Have heard that discussion many times about the YSP Tom.  My question would be, where does it end?

Should Wal-Mart disclose what they paid for the new Plasma you are buying?

Should the Ford dealership disclose how much it cost to build that new Expedition?

Should the local pub disclose that the draft beer you just bought for 2.50 actually costs them just over a dime? 

In the end what does it really matter what any given LO is making if the deal is better than the next guy?  At some point would'nt you be punishing the guy who is selling to Provident because they are paying more yield than say Wells?

Being able to see the other lender's quotes forces us, the lenders, to be competitive. I see no reason for disclosure of this on the quote. It will just create additional work per quote and be another thing for people to falsify.

My intention on this thread was to get purely technical input on what we need to get to give an accurate quote, and what a potential borrower needs to see from us to fully understand what we are offering. 

As I think abou this a little more, I guess a good argument can be made that this is a quote, not a disclosure, and keeping it as simple and easy to understand as possible is more important than adding interesting but secondarily relevant information. After all, we are not disclosing title and escrow fees, which are arguably more relevant than YSP to a borrower's decision.

Still, for me, it's not that big of a deal, and I could certainly live with Zillow deciding that either way, especially since right now there is no such disclosure requirement on the part of other types of lenders. At this level, the most important thing a borrower needs to see is what they are paying, and what they are getting for their money.

In that light, I would like add the following:

From a lender-

1. At least on refinances, we should be able to quote total non-recurring closing costs.  I can understand how on a purchase we can't do that, since we don't know who the title vender is and who is paying what fees, but I don't see any reason why on refinances we can't disclose the entire transaction costs. I have negotialed price discounts for these services that represent a significant part of the value I offer clients, and Zillow dowes not capture this benefit.

Tom O'Leary

I think that disclosing the YSP would be a very difficult thing to require. My reasoning is that all Brokers will be disclosing this on their GFE whereas Correspondents and Banks will not, therefore what is keeping a Bank or Correspondent Lender from stating $0 in YSP (even though they are really making it) since they will not have to disclose it at any point of the process.

I am a Correspondent Lender and I feel that the Brokers would be at a disadvantage since theoretically they would get “caught” should they not disclose it at the time of submitting their quote whereas a the other lending institutions would not.

Does anybody else feel that way?

I'm all for submitting YSP.  I see no long term disadvantage to brokers from  correspondents and banks.  I suspect that brokers will work hard enough to turn it into an advantage.  It might even help eliminate  a lot of the BS quotes on this site.

Here's something to think about.  This is a service for CONSUMERS not lenders.  There are already lead sites that allow every one of us the opportunity to quote rates and fees.  Zillow has correctly identified that these sites fail consumers.  They have dreamed up this service as a solution.  They have promised tranparency.  They have put faith in anonymity and back ground checks. 

Why not push a little further towards transparency and include this bit of information?  It won't hurt consumers.  It will differentiate Zillow's service in a very useful and unique way. 

Does it make it harder on lenders?  Perhaps, but is this a service for consumers or for lenders?

Hey tom let hud address that issue okay...:)

Can't speak for Tom, but I'd rather have the market place make the call.

Leaving aside the YSP disclosure issue, I think another thing we need to know is if the FICO is over 700. My conforming price is different at many LTV's if the FICO is over or under 700, and I assume it is for most other people too. 

If we can't get that information, maybe we should be required to show the minimum FICO needed to deliver the rate we are quoting, along with the minimum LTV.

I've personally kind of changed my mind on YSP disclosure on quotes. I think it would cause more confusion than anything. These are quotes, not disclosures, and should be as simple as possible while still telling the borrower everythign they need to know.

Tom O'Leary

Don't really see the point of disclosing the YSP at all Tom, regardless of when.  If the rates and fees are the same who cares what the yield is?

Its

Would

Colorado-

I have actually come around to that opinion myself. My understanding is that by next year we will probably all be forced to disclose YSP by Federal law(I have to already in CA under state law), so why not get ahead of the curve. As I thought about it a little more, Garza's advice made sense to me, and  I also started thinking about this more as a quote than a disclosure. 

Tom O

Unfortunately I think Tom is getting a little ahead of himself by wanting all of the items he stated above.  This is a quote, nothing more, nothing less. 

O the YSP, I think it will cause confusion to potential borrowers by thinking that is a charge to them.  Most borrowers are unfamiliar with the YSP although it appears on our GFE's and Settlement Statements.  Since this is a QUOTE, I don't think it is necessary.  For the most part, we are basing our quotes of pure speculation as to what the borrowers credit is, DTI, assets, etc.

I think that what Zillow is asking for is sufficient for a quote.  If the potential borrowers want more information, they have our contact info to do so, at that time you can address other issues not asked for by Zillow.  Hence the GFE once all info is gathered.

As for the escrows, most borrowers (I would say 99% of them), do not even realize that they have the option of not escrowing.   I think it would be quite confusing for the borrowers.  I give all quotes assuming they want escrows.   If a borrower is aware of the options, I'm sure  in the "Comments to Lender" section, a borrower can request no escrows and you can price it as such.