Ugh.

09/05/2008 3rd Repost: 0.125% worse to price for all products. Total adjustment for the day: 0.375% worse to Fixed products & 0.25% worse to all other products.

  • September 05 2008 - US
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Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (40)

Yeah I am so gald Tom jinxed everything with that "Rates in the 5's" thread yesterday...

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Profile picture for Rob Cochems

Tambourine,

 

Its still better then yesterday...and its Friday.  Its gotta be close to happy hour out there :)

 

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I've had people quoting 5.375 on a 15 yr out here?  Which lender is that-Zeno from planet Beano?

 

Nah, happy hour isn't until the little one is down.  So not till around 8.  Ugh - again.

 

Joe-guess we all know what NOT to post next time anything good might happen! 

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Profile picture for curiousm

Can someone explain to me what this pricing means?

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Profile picture for Steve Humpfle.

5.375 @par in CA after the second worse midday.

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Profile picture for Steve Humpfle.

That would be on a 15yr fixed.

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This is in CO, we get hit with a .5 hit, just for being in CO!  I looked at one of the MOST aggressive lenders and 15 yr on a R/T at 80% was at 5.5 paying .125.  5.375 was at a cost of .375.

 

@Curiousm-what do you mean?

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Profile picture for Sir Allan

Hi.

 

I can get 5.375% on a 15 year fixed. But that was this morning. I think you have to pay a .25 now.

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Profile picture for Rob Cochems

Tamms,

 

The prov hits you .50 in CO?  I knew there is a reason I hate em.

 

Had 5.375 at a few places this morning, and I will on Monday.

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TBW does too. 

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Curiousm,

The pricing you are seeing are the fixed rates for conventional mortgages usually and the correlating wholesale pricing for the day.  The only problem with it being seen or viewed from a consumer's standpoint is that it is our cost of goods and so there would have "markup" or profit or labor or whatever one wanted to call it on top of it.  It all is shown at the closing table and even now required with some Good Faiths, but what you saw was the raw pricing.  Hope that help.

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curiousm, when we get a rate sheet there are multiple rate/price combinations.  For instance, the current rate sheet from one of my lenders lists rates from 4.875% to 6.625% for a 30 year fixed.  Assuming a 30-day rate lock, if I price the loan at 4.875% I will have to pay the lender 5.543% of the loan amount which is passed on to the borrower as discount points.  On the other hand if I price the loan to the borrower at 6.625% the lender pays me 3.068%. Pricing varies by the length of the rate lock. 

 

As MW mentioned that is the wholesale rate.  When I price a loan I add on $3,006.00 for my fees and my lender's fees.  Those fees are fixed, and are the same whether the loan is $100,000.00 or $400,000.00. 

 

Let's say I quote a $100,000.00 loan.  If I want to quote 4.875% for a rate than the total fees will be $3,006.00 plus the discount points of $5,543.00 = $8,549.00.  On the other hand if I quote a rate of 6.625% the total fees would be $3,006.00 minus the amount the lender is paying of $3,068.00 = no lender fees and a credit to the borrower's other closing costs or prepaid items of $62.00.

 

As brokers we have to disclose all that, your local bank just tells you the rate is 6.625% with lender fees of $1,750.00 and you never know about the other $3,068.00 they made on your loan.

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Profile picture for John Paunan

Dudes,

Where are you seeing this?  I'm looking through and par is 5.5 on a 15 year.

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Profile picture for Rob Cochems

Dude,

 

Peeps in Illinois say dudes?

 

Pricing from the morning, not so much anymore.

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Hearing JP saying 'dudes' just doesn't sound right!

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Profile picture for curiousm

To Martin Waering and Dream Home Funding.

 

I appreciate you answering my question. I come to Zillow to learn about the market. It is true that my sister in law was given a very bad loan by a Mortgage Broker. It is also true I have read many things about Mortgage Brokers and seen a lot of it on T.V. I do realize that people are people and not everyone is bad. You both refrained from acting like children and posting nonsense . You simply took your time to answer my question. I must point out that in the short time I have been reading Zillow, I am shocked to see how immature almost all of you are . I cant imagine for the life of me going into my bank and watching the employees act anything like I have read on here.  I am glad you both act like professionals . I have noticed the rest of them seem to talk about nonsense. Fight with each other or try to glorify themselves. Thank you for taking the time to explain the finances behind an interest rate. I appreciate it.

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curious- have you ever been on other message boards? This is not a bank.

  • September 06 2008
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Curoism,

You are welcome and thank you for the compliment.  I would like to point out that these boards may seem childish to an initial view, they really are very real, accurate and honest in many senses of the word.  The boards have the clearest information without any opaqueness.  When you read peer-peer banter and chastising, it is many times about trying to up the standards in our profession. If you were to see the "internal emailings" of Fifth 3rd Bank for example, you might be shocked and saddened as to who they really carry and carried on and the lending programs and marketing schemes deployed over the years as well.. Maybe, maybe not, but you and I will not see that because it is not transparent.  Here we are connected in this portal and none of the chats are private.  I like that and we do our best to research, educate and entertain as well..  Stick around and you'll see and we welcome different perspectives and truly value borrowers/buyers perception.  Thank you again and the other Martin in TX.... he's my younger and brighter cousin... just kidding... We're the M&M gang.

 

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curiousm, thank you. 

 

BTW, I didn't really complete my answer above.  When you see us mention pricing got better/worse by .125%, that means that if it got better by .125% in my $100,000.00 example above the lender would pay an extra $125.00 on that 6.625% rate or charge $125.00 less discount to get the 4.875% rate.

 

Regarding what you see/read in the media about Mortgage Brokers, keep in mind that the media uses the term generically to refer to all loan officers regardless of where they work.  Most of the horror stories in the media actually involve people who are not Mortgage Brokers or their employees.  You will hear them referred to as "unlicensed Mortgage Brokers."  With the exception of Alaska, Mortgage Brokers are licensed in every state, so if the bad guy in the story isn't licensed, than unless the story took place in Alaska he also isn't a Mortgage Broker.

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Profile picture for curiousm

  I have always believed that people do what they think they need to . Quite often, folks get so wound up into what they are doing they cant see it objectively. From where I am sitting its not the subject matter being hashed out. The subject at hand almost immediately gets twisted into something subjective. I was in the military for years. Certainly we know that the spoken word on a professional level is not necessarily the same thing as at the bar with some friends.

  The average Joe like myself comes to Zillow to get information and what we find is a bunch of childish ranting that serves the Mortgage Brokers social needs. Nobody can tell me that writing these things up here for everyone to see is normal or reasonable. Its very difficult to get any information if I have to wade thru the nonsense to get anywhere. Case in point is this discussion. How many replies of nonsense were there before anyone even bothered to explain what these points were? If there is one thing that turns people off its childish nonsense. Even if we try to put lipstick on it.

 

 

 

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Profile picture for curiousm

Dream Home Funding. So in other words you have some kind of spread that you deal with. How do you know where to put the interest rate ?

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Curiousm -  I am a newer Lender here and have to agree with some of the points that you have made on this tread.  On another Tread, you popped in and made similar comments.   I am not sure if you are a consumer or lender (with an Alias).   Some threads here lenders discuss items within our industry that consumers would have a hard time understanding.    Zillow is a great place for consumers to recieve quality information from a group of Qualified Professionals.   At the same time it is an open forum where a few trouble makers and self serving people try to benefit themselves.   Unfortunatly those people tend to disrupt the flow of good information.  You need to look at the end result.   IF you are a consumer, it is best that you avoid the posts where lenders discuss industry issues.

 

Just my 

  

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curiousm, when I quote on Zillow I post 2 quotes.  One at a "par" price (meaning as close to no discount or rebate as possible) with approximately $3,006.00 in lender fees (give or take a small discount/rebate since it is rare to have an exactly par price), and one with no lender fees.  The rate on the no lender fee quote varies dramatically depending on the loan size since the fees are fixed, and the amount the lender pays varies with the loan amount.  For instance, right now to do a no lender fee $100,000.00 loan I have to quote 6.625%, but on a $400,000.00 loan the rate only needs to be 6% to offset the lender fees. 

 

Every lender determines the rate they are going to quote by first establishing how much they need to make on the loan, then determining what combination of rate/fees will get them there.  If you are dealing with a good broker, the broker will also take into account which of the many possible combinations of rate/fees will result in the lowest cost for the borrower as well. 

 

For instance, San Angelo, TX (where my office is located) is home to Goodfellow AFB.  I finance homes for many active duty personnel, and most plan on moving within 2-3 years.  In that case it is almost always advantageous to have the lender pay the closing costs and take the higher interest rate. 

 

This area is also a prime retirement area.  In most cases those borrowers aren't planning on moving again, and with rates still near historic lows, odds are they will not be refinancing either.  For those borrowers taking the lower rate and paying the closing costs is almost always the best way to go.

 

Has the LO at your local bank ever explained that?  Do they even offer you the option?  In my area they don't.

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Curious George, Martin, no the other Martin, is doing a fine job of explaining how to price a loan to you, but I am curious about you. Your 1st post yesterday on the mortgage threads was:

 For my money, I would just go down to the bank and forget all this nonsense

You have mentioned " the bank " several times since yesterday. Do you work in a bank as a loan officer? Are you in the market for a mortgage?  

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Profile picture for curiousm

Dream Home Funding. I think I understand. You get the interest rate from someone else and then give it to us. Lenderbradford. I have not seen a post yet where the subject was discussed without the nonsense. This has been the source of my frustration when I already have seen a lot of bad news about Mortgage Brokers  from other sources. It  has not helped your cause. Martin Waering and Dream Home Funding simply answer my questions. I dont think its too much to ask.

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Unique Loans. My name is Gerry. Not George. Yes Martin and the other fellow answered my questions. And for my money, I would just go down to the bank instead of put up with all this nonsense. If you all acted like Martin and the other guy I would consider using another source but you cant blame me for being put off with the rest of you.

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Originally the following was a good answer to the question

What is the difference between Mortgage Banker and a Mortgage 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.

______________________

Dream adds one point that is missing for that explaination.   A broker Listens to their client and because of that they propose options that might make more sense to a potential client.   Telling a client that they are better off with a rate .50% above another rate being offerred is difficult.  It requires an open mind.   Banks do have an advantage because most of their customers come to them believing it is the best thing to do. 

 

Here at Zillow we can (or at least attempt) to educate people that they have to be informed and educated.  

 

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curiousm, sorry if I offended you, was just wondering.   As I said this is an open forum and there are people that come here to still the pot so to say.  

 

 You commented while i was making another post.  

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curiousm, I get a wholesale rate from my lender then either mark the rate up, charge a fee, or a combination of the two to compensate me for the services I perform.  The wholesale lender I work with is a bank, and you can walk into one of their branches and get a loan directly. 

 

The kicker is that in almost every case if you go directly to them your loan will be more expensive.  Why?  Because a broker like myself typically has a small business with minimal overhead.  That bank branch has a lot of overhead, and much of it not only drives up the cost of your loan but contributes to poorer customer service.  You call my office who answers the phone?  I do.  You call the bank who answers the phone?  Probably not your LO, and when you get transferred odds are you're still not going to get your LO.

 

Not everybody in this forum is a Mortgage Broker by the way, so don't make the mistake the media makes and assume that all the bad guys are brokers. 

 

To further confuse matters my name is also Martin.

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One more item about the difference between them. Most Mortgage Bankers (Direct Lenders) in California are not required to disclose their fees because they are licensed by the Dept. of Corp. Although, most have very small lines of credit and a large % of their loans are brokered out. Also, they are limited to the amount of wholesale lenders that DRE licensed brokers are approved with. The reason is that most wholesale lenders in CA do not approve DOC licensed brokers. Most DRE licensed brokers would join CAMB while "bankers" would join NAMB which has a more powerful lobby! It is not an equal playing field!

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