Let bankruptcy help fix bad mortgages Christian Science Monitor, MA - She owned her simple brick residence outright until four years ago, when a mortgage broker stopped by and offered her a loan too good to be true. ...
Feds charge six with alleged mortgage fraud Springfield Business Journal, MO - The former brokers did not disclose to out-of-state lenders that buyers would receive a significant portion of the purchase price - more than $100000 in ...
Martin Lewis hits back at broker blasts Money Marketing, UK - Lewis told brokers that he is not an adviser and has never advised people towards a particular mortgage: ?I'm not a qualified mortgage broker. ...
Mortgage scammer sentenced to 30 months Palm Beach Post, United States - A tearful Michel, meanwhile, asked Middlebrooks for mercy in exchange for giving the feds information that forced guilty pleas from mortgage broker Lauren ...
The US Crisis: A View From Mexico Latin Business Chronicle, FL - So I am ready to tell you that the down payment is not 30 percent. It is 2 percent." Did they have that much? No. The broker asked how much they did have. ...
The Mortgage Report North Florida NewsDaily, FL - 52 minutes ago ... may not look this good again for a long time. Carl Trawick is a Mortgage Specialist and Licensed Mortgage Broker with the firm Access e*Mortgage. ...
Reverse mortgages a lifeline for seniors San Diego Union Tribune, CA - Nov 30, 2008 It may not be what they were designed for, but reverse mortgages seem tailor-made for many seniors who are defaulting on their home loans, reverse-mortgage...
Recent News and Articles on the Keywords: broker + upfront + 138 Related to the article below (Last Update: 8/4/2008)
Daily Mail, London, market report column TMCnet - Jul 15, 2008 Dealers in London took profits when they saw Wall Street fail to hold an initial gain of 138 points and trade 69 lower. Bears roared that second-quarter ...
Source: Google News
[PDF]Heterogeneous Homebuyers, Mortgage Choice and the use of Mortgage Brokers - D Duffy, MJ Roche - economics.nuim.ie ... Guttentag (2001) distinguishes between upfront mortgage brokers and ... of Miles (2004)
that brokers encourage the ... Residential Real Estate Brokerage as a Principal ...
JM Bellwoar - NYUL Rev., 1999 - HeinOnline ... specialize in their respec- tive areas, and the upfront fixed costs ... 41 for a list
of signs of introducing broker fraud to which clearing brokers have access ... -
LT Wilson Jr - NML Rev., 2006 - HeinOnline ... These sanctions are effective because loss of the license puts a mortgage broker
out of business.'39 A person who brokers a loan ... ANN. 53-243.12(a). 138. ... -
ME Lewyn - Fordham Intell. Prop. Media & Ent. LJ, 1995 - HeinOnline ...138. ... the agreement gives the licensee absolute power to preempt the broker's programming ...
The FCC has also approved licensee preemption of brokers' advertisements ... -
Do competing specialists and preferencing dealers affect market quality? - R Battalio, J Greene, R Jennings - Review of Financial Studies, 1997 - Soc Financial Studies ... Thus brokers sending orders in NYSE-listed securities to ... to 9-month periods at a
time, brokerage firms may have hesitated to incur the fixed, up-front costs ...
TL Cantwell - Law & Ineq., 2003 - HeinOnline ... also pays other fees and costs up-front to the ... will yield skewed results because
all brokers may be ... yield- spread premiums.167 Further, broker-only comparisons ... -
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My broker claims to be upfront, even though he is not on your list of "Upfront Mortgage Brokers". He says he is upfront because he tells me his fee upfront -- he charges me one point and receives one point from the lender. Is this fee reasonable? Is he really being upfront.?"You are paying the broker two points, or 2% of the loan amount, for his services.
Whether two points is a reasonable fee depends on the loan size, and on how demanding and time-consuming the transaction is expected to be.On a $50,000 loan, two points is $1,000; on a $500,000 loan, it is $10,000.If yours is a $500,000 "slam dunk", the fee is excessive. If it is a $50,000 nail-biter, the fee is inadequate.Your broker, who I’ll call a "conventional mortgage broker" or CMB, is not operating as an Upfront Mortgage Broker (UMB). I’ll explain the difference with an example.
Assume that on the day you lock the terms of the loan, the best terms available to both brokers from wholesale lenders on your selected 30-year fixed-rate mortgage are as follows:
Lender
7%
4 point charge
A
7.25
2.9 point charge
A
7.5
2.1 point charge
B
7.75
1.1 point charge
A
8
0.4 point charge
C
8.25
0.5 rebate
D
8.5
1.0 rebate
D
8.75
1.5 rebate
E
9
1.9 rebate
These numbers come from the price sheets that wholesale lenders distribute to their brokers every day. The lenders shown are those quoting the fewest points at each interest rate.
The UMB informs you of his fee and shows you this table. The table illustrates clearly that when a lender pays a rebate to the broker, the borrower actually pays for the rebate in the form of a higher interest rate.The UMB also guides you in making your selection.
If you expect to be in your house only a few years, or if you are short of cash, the UMB will recommend a high-rate loan with a rebate. If you expect to be in the house a long time and can afford the cash outlay, the UMB will recommend a low-rate loan for which you must pay points.
But the decision will be yours, based on your needs.For example, if the UMB’s fee is 1.5 points and you select the 7.75% loan available from lender B, you will pay a total of 1.5 + 1.1 = 2.6 points. If you select the 8.75% loan from lender D, you pay 1.5 –1.5 = 0 points.
The lender’s rebate covers the broker’s fee, which you are paying indirectly in the higher rate.In contrast, the CMB you are dealing with will not show you the wholesale prices, and will not allow you to make your own selection.
He will shoehorn you into the 8.5% loan because that loan carries a one-point rebate, which provides half of his fee. Your needs don’t figure into the equation.Why does your CMB do this? Because he wants you to believe that you are paying him only one point, when in fact you are paying him two points -- one now and one later in the higher rate. If he showed you the price table and let you make the decision, the game would be up.
Your particular CMB does tell the borrower the truth about what he is doing -- he is upfront in that sense -- but it is not the whole truth. One can tell the truth and still deceive, and this is a good illustration.This broker’s modus operandi makes him ineligible to be an Upfront Mortgage Broker.
