HR 3915 - Getting Warmer

RE:HR 3915 - Getting Warmer

Carlos — Thu, 29 Nov 2007 13:00:00 GMT

clients have a min amount of time to review documents and sign say 45min-1hour, which is not enough time to go over documents throughly and efficently. I would like to see (TILA) making it mandantory to have documents presented to client a week before signing that way the loan officer has to set a time and go over all loan documents so that the borrower understands what they are signing and cannot come back with I did not know and was pressured into signing something I did not understand.Why not

RE:HR 3915 - Getting Warmer

Matt Graham — Thu, 29 Nov 2007 13:00:00 GMT

Though I do try to be objective, these are Opinion Editorials. I get many emails thanking me for "telling it like it is." And I have yet to receive one email from commenters on this post wishing to engage in a sober and factual debate, just people posting here that want to vent about their own opinion.

When an editor says, "we have a big problem, and it was caused by a broad range of sources," you admit your own narrow focus by arguing with him. That's fine if that's what you believe, but don't accuse me of a narrow focus when I was explicit about the broad nature of the problem.

RE:HR 3915 - Getting Warmer

I read it..did you? — Thu, 29 Nov 2007 13:00:00 GMT

Matthew.. thanks for your perspective. Your editorial shows that you're well read , although not as objective as you'd like us to believe. You've made valid points, but pointing the finger at bwrs isn't right either. Seems that Sandy shares your sentiment. Kevin..It's clear that YSP's aren't going away, pay attention. Here's hoping this tussle creates a stronger awareness for the bwr and maybe a required "REFI-101" for the consumer. This is not a change in policy, rather a change in procedures.

RE:HR 3915 - Getting Warmer

Kevin — Wed, 28 Nov 2007 13:00:00 GMT

Getting rid of YSP and brokers doesn't solve the problem. Bankers price their loans similar to the way brokers do, but they don't have to disclose what they make. Crooks exist in the bank just like they do in the broker world. the best way to combat the YSP issue is to shop around. If a broker can put you at 6.5% and make a good YSP, while at the same time giving you a better rate than the "bank", that should tell you something about how much the bank was going to get you for. Competition and good due diligence are the key to keeping the price of a loan in check.

RE:HR 3915 - Getting Warmer

Its a Start — Wed, 28 Nov 2007 13:00:00 GMT

It's really interesting how much hooting and hollering can accomplish. NAMB took the best "first step" to represent us. Thank you! Thank you! Thank you!

RE:HR 3915 - Getting Warmer

Watchdog — Wed, 28 Nov 2007 13:00:00 GMT

The bankers out there have to be laughing that the whole YSP problem gets laid on the brokers lap. Because it is all internal, they do not have to disclose the fact that they pay their LOs a form of YSP for upselling the rate. It gets back to whether something is a problem itself or the abuse of it is a problem. YSP is not a problem by itself but becomes one when it is abused and there is no trade-off for the borrower. Originators who think they are entitled to a bigger compensation because a subprime loan takes more time and effort need to remind themselves that they have chosen to work in that arena. The right to charge whatever you want does not come along with working in the subprime market but many LOs and managers think that it does.

For the underwriter who wants to blame a borrower for fraud and lying on an application, a couple of things: 1) That is the type of stuff you are employed to catch so do your job (I realize it is hard to when you are pressured to approve every loan) and 2) it is rare that a borrower is the driver of fraud. They may be a party to it but they do not know where the "lines" are drawn and are not the ones in charge.

RE:HR 3915 - Getting Warmer

Mike Johnson — Wed, 28 Nov 2007 13:00:00 GMT

Hey Underwritter ARE YOU NUTS!!! As a broker/LO it is my job to screen the client and and qualify him or her for a particular product that the BANK offers. The last time I checked WE dont have the power to make lending guidelines. If you want to blame someone blame the banks that came out with these programs.

RE:HR 3915 - Getting Warmer

BRANDON OSWALT — Tue, 27 Nov 2007 13:00:00 GMT

Wow another law against us brokers. Even though this law has no real effect on us brokers who do our jobs the right way. Which I think other avenues of our industry need to learn. But what really set me churning is the simple fact that we as brokers and mortgage professionals (which I will agree are few) get slammed from every goverment agency, media outlet, and now even the regular Joe because of the media, for what is going on in the Real Estate market.

My simple resonce to every person who wants to hammer the Mortgage industry is always the same. When People have Jobs People Pay Bills! I don't care what kind of ARM, Interest Rate, Neg Am, Etc. you may have. If you have the money to pay the bill most honest people will pay. Don't get me wrong I know there are tons of BAD BROKERS out there.

I have seen and fired many of them. And I know there are tons of people who were taken by increased appraisal, stated loans and all the other million reasons people can blame the loans for their default. But I believe that if all our Jobs didn't leave and go to Japan, China, Mexico, etc. Then people would be paying thier bills. Yes their loan may not be the best in the country and they would rather have better terms.

Well if people weren't losing their jobs at as rapid pace as foreclosures, then homes values would be up, and people would be able to Refi into better terms. I am from a small town in Ohio and in my area alone, several companies have left town and left our commmunities members jobless - Large companies such GM, Dephi, Ford, Etc. Is it not ironic that the areas that are supported by these large companies are also among the highest foreclosure rates??

Sounds Fishy to me! I think it is about time we wake up and ask our local congressman on why our jobs are going out of the country and what is their plan for replacing those jobs. Stop using the mortgage industry as a scape goat. Spend your time and money on bringing Jobs to our cities and not let them leave over profit sharing! Wake Up America.

RE:HR 3915 - Getting Warmer

sandy — Tue, 27 Nov 2007 13:00:00 GMT

I disagree, this law does need to be enacted. As an underwriter, the problem "Starts" with the borrower and the mortgage broker. They do need stricter laws and consequences. Many brokers/agents one got into the industry to make a fast buck. And many of the borrowers lied on the applications. Half of the loan agents didn't know anything about how to take apps. The SIV and CDO etc vehicles will evolve as well, just like the guidelines are changing.

RE:HR 3915 - Getting Warmer

Russell — Mon, 26 Nov 2007 13:00:00 GMT

Excellent article, Matt! We need more people to read and understand the simple facts and concepts you outlined so lucidly. Brian, you said brokers haven't ever had a regulatory standard? So, who exactly has been licensing and overseeing brokers for years, if not a regulatory agency? (Dept of Real Estate, perhaps? oops, that would be a regulatory agency!)

RE:HR 3915 - Getting Warmer

Mary Scheulin — Thu, 22 Nov 2007 13:00:00 GMT

Most posts seem to miss the core issue. Mortgage originators CAN'T sell a financially questionable mortgage IF the Lenders AREN'T offering them. LENDERS have caused the problem by allowing "financially unhealthy" borrowing. When Congress serves only BIG money interests this hurts average citizens. It's Haliburten, Oil, and NOW the Banks! BUSINESS AS USUAL!!! Why put the troops (mortgage loan officers) in front of a firing squad when it's the Generals ( lenders) who are the criminals?

RE:HR 3915 - Getting Warmer

Marco — Wed, 21 Nov 2007 13:00:00 GMT

Mr. Ken Cook you have actually demonstrated who the "mis-informed" is. Greedy homeowner hopefuls who thought there was no end to real estate appreciation chose the "cheap" and "risky" loans because they were gambling that they'd be able to sell the home for a huge profit before the loan reset. If the borrower didn't demand the "low payment" options despite the risk the broker could not have originated the loan. I've heard too many people speak of "equity' as if it's a bank account. Grow up.

RE:HR 3915 - Getting Warmer

Dr. Bill Hatch — Tue, 20 Nov 2007 13:00:00 GMT

I agree with Mathew that borrowers should read before signing. The problem is that most people do not know they can demand to see their loan papers one day before closing (they do not read the consumer disclosure booklet). Bill

RE:HR 3915 - Getting Warmer

Matt Graham — Tue, 20 Nov 2007 13:00:00 GMT

Brian: How do I know it's a higher standard? Well, it says that in the bill. Brokers have never had a standard? Actually we do, (although I know some states don't). At any rate, I'm not counting on that to get me clients. I let good rates and service do that. I'm just saying that ALL LO's should be held to the same standard. If the gov is going to make me jump through more educational and licensing hoops than an FDIC LO, I will wear that proudly.

As far as Ralph Roberts, I don't understand the comment. Please clarify and I will address it if necessary. No brokers are fond of him right now as he has BLAMED the meltdown on a very limited number of factors, and written publicly that brokers make 7 points per deal when I average 1.5%, a lot less than any realtor I know.

If you think I've missed the boat somewhere here, go ahead and email me. I will gladly update the article with your criticisms in quotation marks. And if I have made any factual errors, I will, of course, update them immediately.

RE:HR 3915 - Getting Warmer

Brian — Tue, 20 Nov 2007 13:00:00 GMT

Brokers have never had a regulatory standard. So you are saying just because brokers have one now consumers are going to be drawn to you over FDIC institutions? Wow, you must not understand consumer trust.