Comments on: Surveying The Shifting Mortgage Landscape

By: Seth Taylor

Seth Taylor — Mon, 25 Aug 2008 06:36:37 +0000

He/she who gives the best information the fastest wins is a great statement and has always served me well in this business, as I have always played by this rule. But I just don’t understand how the mortgage business isn’t tranparent already. I cannot think of one business that has more disclosure at the beginning, middle, and end of the transaction. The problem is that most people cannot learn all this information in the time it takes from the loan application to the closing.

Please be careful about villifying all mortgage brokers as purveyors of a shell game, as most provide a great service that has resulted in benefits for buyers and real estate agents alike. A lot of what I read in this post could apply to other bloated business models as well, including most sectors of the real estate industry. Buying a home is choice and not learning about it is a choice.

It may seem like the best option is to migrate all business back to the local banks and credit unions but the main reason that mortgage brokers had a rise to 70% market share is because they provided better rates, lower fees, and better service. In addition mortgage brokers actually provide more disclosure than banks, especially in regards to the yield spread. As we know, banks don’t disclose yield spread.

All of the information is out there for people to learn. If they choose not to learn or can’t learn it, perhaps they should pay a few hundred and have an attorney explain it to them. Anyone who wants to learn the terminology can go to – and use the glossary.

By: Ginger Wilcox

Ginger Wilcox — Mon, 11 Aug 2008 15:56:05 +0000

The mortgage industry has been like the Wizard of Oz. I look forward to seeing you lift the curtain so we can see the substance behind it. Welcome to AG.

By: Bill Lublin

Bill Lublin — Sun, 03 Aug 2008 05:37:50 +0000

Jeff; Ok, so you’re not just a pretty face

If you can’t dazzle them with detail, baffle them with Bullsh** is the way I learned the phrase from a mortgage guy a long time ago. But that was back in the day when real estate agents were generally the first point of contact, and the good agent always worked to get “their” mortgage lender used because the agent knew the LO would get the deal done for the client. We weren’t worried about predatory lending as much as we were worried about incompetent lending.

As the lending industry became more sophisticated, and it became easier to get into that industry, you are 100% on the money – the shell game began, the mortgage industry start placing themselves earlier in the transaction so they could capture the buyer prior to the purchase, and the relationship of the agent and the loan officer became different. When I was an active agent, I knew the processor for every loan officer I worked with, and spoke with them regularly. And if I didn;t know the officer’s processor, I would find someone I knew who did, and get an introduction. And getting the buyer approved was a cooperative effort. But the stales werent; as high as they becamse over the last few years.

Both the real estate and lending indutries need to remember their responsibility to wards the consumer- to educate them and help them through the process as a team that has the consumer’s best interests at heart – and remove the fog of confusion they face.

By: Glenn fm Naples

Glenn fm Naples — Sat, 02 Aug 2008 12:04:59 +0000

Jeff – really a super first post. Looking forward to your follow-up post on identifying the best mortgage professionals.

By: Jose

Jose — Sat, 02 Aug 2008 11:07:34 +0000

Great post. No one should be afraid of giving information for free. Consumers just want to know the essentials, they don’t want to become one of us. I would even say that they want to know why they need us and that providing great content is the way to justify our commissions and our professions.

By: Mike Taylor

Mike Taylor — Sat, 02 Aug 2008 10:44:48 +0000

“the typical real estate professional’s mortgage acumen doesn’t reside much higher on the relative IQ totem pole.”

Too funny, but true. We as real estate agents are not doing our job if we cannot sniff out these subpar lenders or mortgage brokers. It does seem like the mortgage industry is one of the least transparent professions out there.

By: Jed Lane

Jed Lane — Sat, 02 Aug 2008 05:51:50 +0000

Jeff,
Consumers want information and yes they don’t want to have to pay for it. But they don’t really want it raw. They want it formatted and easily viewable and some might even want to be able to export and analyzie it. But one thing is certain they don’t want to have to go out and gather it and produce it.
Up comes a new kid on the block that can compilate it and display it and maybe even mash it up with some really cool applications. Everybody likes the way this kid does it and he gets backing to grow. He will eventually have to produce a revenue stream and it’s not going to come from the conumer of the displayed data so the kid has to find another source. Well, who wants to be the first person called when the consumer has consummed enough data and now needs someone to help them “to decipher it”. The kid can charge them for placement and leads.
I know that this position is counter to the main thrust of 2.0 but I’ve been around longer than most yet I am pretty comfortable with the medium. There is no business that gathers data to give away. Governments do that, not businesses.
I don’t think we should all be singing “Oh what a wonderful world it would be, if all the data were free”. Because it won’t be free. It might not cost the consumer anything but we will be paying for clicks, ad words, enhanced listings, neighborhoods, zip codes and any other way that a third party can figure to insert themselves into the transaction.
All of us, the early 2.0 adaptors, need to create a method that will give the data to the consumer and bring the contact directly to us when it is time to be contacted. I say we create a new ReBar NAR Camp. Kind of a joke but NAR is 100 this year and it got me thinking about it’s origins. Bunch of guys, no women at the time, got together with a better idea or came up with the better idea and created a mutually beneficial, client and professional, business model.

By: Dan Connolly

Dan Connolly — Sat, 02 Aug 2008 05:33:51 +0000

Every time I don’t get involved in the loan I regret it. I had a closing last week that was a classic. When I met the buyer he had a pre-approval letter from the lender, who said he could close in three weeks. It was a foreclosure, the Seller held the earnest money.

The buyer was putting 20% down and had over 700 credit score. At the end of 30 days the loan still wasn’t ready to close, the buyer paid $250 for a two week extension, with the stipulation that this was the only extension and all monies would be lost if the property did not close during this extension. We didn’t get the HUD until the last day of the extension at 4:00 pm. The interest rate was 1/2 a point over the market and the closing costs were about $2400 higher than expected. There was a $2640 brokerage fee (3 points) for the originator who brokered the loan to a different lender, and regular closing costs for the lender who actually made the loan.

In addition to all that, they disclosed the $2,700 yield the lender made on the back end for selling the higher rate. The lender was best friends with the buyer’s son. I told the buyer he was getting screwed, and the only thing he could do was not to buy the house. Guess what? He bought the house.

I have always been reluctant to try to move buyers off lenders they seem to have a relationship with already. I respect loyalty and try not to make the Buyer feel that I am pushing someone (perhaps they would think I am getting a kickback). But that’s over, I am not letting a buyer use a untried and unknown lender again without a fight.

By: Mark Eibner

Mark Eibner — Sat, 02 Aug 2008 00:11:57 +0000

we're at it again Surveying The Shifting Mortgage Landscape: Comment on this post and s.. http://tinyurl.com/6cko2q

By: Mack in Atlanta

Mack in Atlanta — Fri, 01 Aug 2008 20:53:14 +0000

I’ve heard a lot of agents say “the lender doesn’t want me involved.”

Ask the lender what their agency relationship is with the buyer. Guess what, they don’t have one. We as agents do have an agency relationship with our buyers and our duty is to help them through the minefield of purchasing a home. It is our responsibility to be involved.