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lender or broker

for mortgage which one is better,lender or broker, I mean is there any advantage for any of them and do the brokers charg extra fee?
thanks
  • March 11 2010 - US
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Answers (405)

Hi, the biggest advantage of a broker is the variety of loan products they may have.  If you have a unique situation about your loan or as an example a high debt ratio, a broker may have an investor that is OK with whatever the situation is.  They may be more flexible on terms.  Lender has many advantages as well.  Whether they are from a particular mortgage company or a bank.  They will be very familiar with the loan products their company has and also what their underwriters will consider as well.  A referral from a friend , your Realtor or bank may be a really good place to start.
  • March 24 2010
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Profile picture for blue screen exile
When you reload the page, it updates, and for each occurrence of your user name.

By the way, consider non-profit business, corporations, entities...
Those that own them or work for them do have income, even though the entity can't have a "profit".

The director of the Red-Cross gets paid over $1 million per year.  (A corrupt non-profit organization created by the government in my opinion; there are much better organizations that are much more efficient and effective with their resources at helping others in times of disaster).

And in my mind, Mother Teresa was much wealthier than most Americans; but wealth is not measured in dollars.
  • March 24 2010
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Pasa,

Mathematical problem. I just posted to you. That was my 4,001 post. Then, I posted to SoCal. The number didn't change. Why? And, how many times has that error occurred before? .... Happy funding, Rudi
  • March 24 2010
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FWIW... I never did a single 80/20... not- a-one... 

My first 2 years as a lender all's I did was refinances, zero purchases, then for YEARS all's I worked on  was 2-4 Unit NOO purchases, and of course the Primary's., Second and Third Homes of my investor clients... 

I have a serious distaste for ex-subprime L.O.'s. I worked at a large brokerage and I used to hear other brokers laughing at the "Deals" they were putting their borrowers in. I once saw an LO get an award for earning 15K in fee from a 300K loan... made me sick to my frickin' stomach.

While I am a Capitalist... intentionally screwing people over with massively padded and or hidden junk fees is something I find intolerable. 
  • March 24 2010
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SoCal, Luv Ya'! .... Happy funding, Rudi
  • March 24 2010
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Pasa,

"I think loan officers are just in it for the money." Please tell us how this is different from other professionals that work to provide a living? ... Happy funding, Rudi

No, don't answer. I don't want to get trapped into this thread. # :>)
  • March 24 2010
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Profile picture for blue screen exile
I charge a fair rate for my services, and provide quality work.  Whether people want to pay me, is their choice.  I don't advertise.  I've had years where expenses exceed revenue.  I could make as much working for someone else, but then I could not provide the quality of service I'm known for and would expect future problems; nor would it give me the freedom I desire with my schedule.

I don't believe in capitalist, socialist, nor communist economic models.  There are much better choices.  All three of those models encourage corruption, exploitation, and non-sustainability.

I don't need the money.  My only reward is quality and meeting people's needs.
  • March 24 2010
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Does it matters that Bank NON-Transparency was a MAJOR contributor this little thing know as "The Mortgage Meltdown"???

For what it's worth, I'd like to blame the lenders for providing the products. I'd also like to blame the loan officers for getting people into them. And to be sure, there is more than enough blame for both to get a fair share...with some left over.

But the ultimate responsibility lies with the maroons who jumped into these products. Either they did so knowing that they were highly leveraged and exposed to any adverse market moves, or they did so without having taken the time to fully understand what they were doing. For what it's worth, the second group is more culpable than the first.
  • March 24 2010
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Revenue - Expenses = Profit 

Pasa do you earn a profit from your services? 

I do... that's what pays the bills every month for me... and millions of other Americans...

 
  • March 24 2010
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Profile picture for blue screen exile
That looks like a motor boat, not a sail boat...
more deception?

By the way, both the FBI and the CIA are hiring for data collection and covert operations, also allowing one to spend their time on the beach relaxing, assuming that you can be observant when relaxed and have a good memory for details.
  • March 24 2010
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Has been somewhat interesting watching the tennis match. As a consumer, I really don't care about MBS or YSP or APR (gasp!) or any other TLA. I also really don't care about how much money Lender A is making compared to Lender B. I am assuming that both lenders are in the game to make a living, my goal is to get the best service/product combination I can for the money I spend. So, when all-is-said-and-done, what I really care about is...

1.  What rate/term product can you provide?
2.  How much is it going to cost me (total, including all the 3rd party fees etc)?

Please don't give me any crap about "no cost", it's all going to cost me in some form or another. Either I pay it up front, or it gets financed into the principal, or it gets bundled through a higher rate. If you can answer questions #1 and #2, I am smart enough to figure out where the money went.

To that end, I don't care what the lender's business model is. And, if I think their service is good enough, I'll even pay a little extra on lender fee to obtain their services and keep them in business. There are already too many WalMarts (low cost, maybe nice people, but no domain knowledge) in too many industries for my taste. Sometimes, being a smart consumer means helping to keep the knowledgable pros in the game...for the next time around.
  • March 24 2010
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ZMM indicates 30 year quotes are up only slightly today...

30 year quote rate trends

It is typical market fluctuation and nothing to worry about.  I don't think the health care legislation will have any real impact on rates nor unemployment nor Fed rates.

The end of April deadline for the government home buyer incentive may have some temporary impact on rates, but again, nothing to be concerned about.

Doesn't look like the small change in rates today would amount to the difference of $2k anyway.

And I'm not in business to make a profit, but to provide a service.  Capitalism and Socialism have nothing to do with it.
  • March 24 2010
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Jim-I priced it 15 minutes after you did so not sure what checking my current rates would have to do with what was avaialable at that time....About the same as what YSP has to do with what the borrower ends up getting at the end of the day NOTHING!

MBS took a big hit today...took a big hit before they even opened up..So todays pricing is worse.
  • March 24 2010
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"If some one would PAY me what I earn me to chillax on the beach and sip margaritas all day... THAT would be my profession... Dare to Dream" -

In Southern California, people do get paid for such things... the position title is either called "escort", or "body guard".

Or for the elderly or handicapped, the position is called "care giver".
  • March 24 2010
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Andrew, 

As for my views I'm a:
A) Capitalist 
B) Fiscal Conservative 
C) Social Liberal 

As for fees... Better check your rates sheets buddy. The Note just went to 3.81%... most of my wholesale lenders have repriced upwards... 

BTW...  I am not Rose... nor do I have a second or alternate Zillow acct. 

@ Pasa, YES I am in it for the money. Mortgage Lending is my chosen Profession and my career. 

If some one would PAY me what I earn to chillax on yachts all day sipping margaritas... THAT would be my profession... Dare to Dream!!!

  • March 24 2010
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I think the Mortgage Meltdown reference may be about large commercial banks that packaged paper with bogus AAA ratings. Maybe? I would agree that was a major cause of the current malaise.
  • March 24 2010
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Sad to say Pasa...But I agree with you..... Does your 5% count the loan officers that don't really have a clue what they are talking about but simply regurgitate what they have been told by some co-worker or manager in the past that was less than honest!
  • March 24 2010
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Profile picture for blue screen exile
I haven't seen a loan officer fully disclose anything yet.  And again, YSP is not the information I care about being disclosed.  I'm more interested in what percentage of their loans are funded through various lenders, how much of the loans are funded in house or sold off, who does the underwriting, whether the rates can be tracked by an independent source prior to locking, and if the loan officer can actually fund the loan on time for the quoted rates and terms.  Also interested in how many of their loans cost the borrowers more money through the life of the loan than what they previously had, and if they are selling loans people can't afford, or are the wrong product for the borrower's situation.

And if Rose was going to bash brokers, then why the complaint about a bank lender?  Looks like someone is trying to transfer blame away from himself for his own doings.

I already had one friend lose a home through a shady lender, and a second one through an incompetent lawyer with bad advice.

If one is going to compare direct lender costs to broker costs, then why wouldn't we compare the ones through the same lender?  The wholesale rates are set so that the loans should come out the same after broker compensation.  If they are not, the difference must be take-home pay for the loan officer, or how the overhead for the loan officer is calculated.

Zillow provides quotes for both direct lenders and brokers, I don't see much difference in rates nor whether the people are honest.

I'm still convinced most loan officers are just in it for the money, and that less than 5% are honest (in all areas of their life).  The trick is to find the honest ones that are also effective and efficient.
  • March 24 2010
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Now that's Funny...Banks non disclosure of a number that they don't track is the reason the Mortgage Meltdown Occured!

Care to post some supporting information in regards to that being the "Cause of the Meltdown"?

So Jim....The truth is that you are a socialist and feel that anyone that finds a way to provide goods or services at a lower cost should not be able to take the profit but pass it along to those that are less efficient.
Maybe you should change your picture to Karl Marx...
  • March 24 2010
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No.... I call making it an issue that a consumer needs to be concerned with.... SPIN!

I priced against one of your 30 year FHA loans and could offer the exact same rate with fees more than $2,000 lower...is it a value to the consumer to work with you because the YSP is Disclosed?   NO!  That would cost the consumer $2,000.....Just curious how many consumers would rather pay an additional $2,000.  For your interpretation of Transparancy?

When/If lenders are required to caclulate YSP and disclose it...brokers will have disclose their YSP as well as the lenders YSP if not your 100% transparancy theory is spin and BS...Which it is!

Please stop interpreting what I am saying so I can stop posting on this ridiculous thread and go back to ignoring you!

Rudi-Just because legislation has been proposed...it means absolutely nothing...The fact that our legislators are spending time on legislation that does nothing to help the consumer...is typical!  Almost non of the legislation that has been passed will help consumers but it helps politicians grab headlines which is what most politicians primary goal is!

I don't think brokers should have to disclose YSP either.... but guess what...those are the rules!
 

  • March 24 2010
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Andrew, so you call FACTS spin?

Are you saying 100% Transparency is a disservice to borrowers??
  • March 24 2010
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I feel everyone should disclose in the same manner. For the consumer it would be easier to understand. Regulation is pending for this to occur.

Although, the bottom-line is how much does it cost the consumer at settlement, at a given rate. That final number should be clearly stated and understood, when comparing rates and fees. .... Happy funding, Rudi
  • March 24 2010
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No it wasn't.  




I'm done.   This is like playin poker with my sisters' kids...
  • March 24 2010
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Nic, am I dense because I don't share YOUR point of view?

Does it matters that Bank NON-Transparency was a MAJOR contributor this little thing know as "The Mortgage Meltdown"???


 
  • March 24 2010
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Jesus you're dense.



Yes I don't have to disclose.   Why the hell does it freaking matter????????
  • March 24 2010
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Jim-that is spin and you know it!

If the only way you can sell a loan is by bashing or complaining about how banks and crrespondent lenders are required by law to disclose then bash away...personally I don't see how that is adding any value to your clients but each to there own!
  • March 24 2010
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Nic the thread name is Lender or Broker and the point is Transparency through Disclosure 

a) Banks/Correspondent Lenders DO NOT fully disclose Yield Spread Premium to their borrowers  

b) Brokers DO fully disclose Yield Spread Premium to their borrowers 

Full disclosure equals Transparency... anything else is simply hiding something.


Why is it that NOT ONE BANK or CORRESPONDENT LENDER will simply acknowledge these facts in a public forum???
  • March 24 2010
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Yes any of those will do.  Anything to keep you from trying (and failing) to analyze industries of which you have little knowledge.


Jim---We all know (or at least you should assuming IQ over 60) that it doesn't matter one bit what the yield is.  If I'm making 20k on a deal that is paying you only 5k but I am delivering better terms mine is still the better deal for the consumer.  Period. End of thread.
  • March 24 2010
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Andrew 

The facts are 

a) Banks/Correspondent Lenders DO NOT fully disclose Yield Spread Premium to their borrowers  

b) Brokers DO fully disclose Yield Spread Premium to their borrowers 

Full disclosure equals Transparency... anything else is simply hiding something.
  • March 24 2010
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I was going to thank Rosey for bringing this thread to a less than climactic climax, but I guess it wasn't quite ready. I guess we'll just keep beating on it, losing our train of thought, and beating on it some more.

Left thumb up to JW. Baking is more healthy than frying.
  • March 24 2010
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