As of 20 Oct all loans submited to C/W must have the below disclosure.  Thoughts anyone???

MORTGAGE BROKER FEE AGREEMENT AND DISCLOSURE

Do not pay any fees before entering into this agreement with your Broker. 

BROKER SERVICES – A mortgage broker charges fees to arrange a loan from a lender who will fund the loan. You have engaged ______________________________ (“Broker”) to arrange a loan for you in the amount of $(_______________) (Note:  For a line of credit, the loan amount is the maximum credit limit on the line).  

Broker will assist you in obtaining a loan, but Broker does not distribute the products of all lenders, and so cannot guarantee you the lowest price or best terms available. Be sure that you understand and are satisfied with the product and terms Broker arranges for you. 

BROKER FEES - You agree to directly pay Broker the following fees:

Application Fee: $(_________) [not including any application fees paid to lender]

Processing Fee: $(_________) [not including any processing fees paid to lender]

Other:    $(____________)   [________________________________________]

Broker Fee (Points) $(__________) This fee will not exceed (_____)% of your loan amount

These fees will be paid with cash you must bring to closing, or, depending on your loan approval, you may include some or all of these fees in your loan amount and pay your Broker at closing out of your loan proceeds.

You also agree that the lender may pay your Broker additional fees.  Any additional fees paid by the lender to Broker will increase the interest rate on your loan beyond what the interest rate would be if some or all of these fees were paid directly by you.  Based on current market rates and your current loan request, the lender may pay Broker $(_____________), but it may go up to $(_____________) based on your current loan amount of $_______________.  In no event will the lender pay the Broker more than (______)% of your loan amount.

Once your interest rate is locked and your loan amount and terms are finalized, your Broker will be able to tell you the exact amount of all fees.

BASED ON A LOAN AMOUNT OF $(________________), THE MAXIMUM AMOUNT OF FEES THE BROKER MAY RECEIVE AT CLOSING IS $[____________________].

THE FEES IN THIS AGREEMENT ARE FOR BROKER SERVICES ONLY AND DO NOT INCLUDE OTHER CLOSING COSTS OR CREDITS FROM BROKER OR OTHER PARTIES.  See your “Good Faith Estimate of Closing Costs”.  (Note: If your application is for a line of credit, you will not receive a Good Faith Estimate.  Rather, at the time of application, you will receive an estimate of the closing fees.  You may also request an itemization of those fees.)

                                                                                                                                    __________

DO NOT SIGN THIS DOCUMENT IF YOU DO NOT UNDERSTAND IT.

Borrower:                                                                  Co-Borrower:                                                

Signature:                                                                 Signature:                                                     

Date:                                                                          Date:                                                              

_________________________________

By: Signature:                                                            _______________________________

Printed Name:                                              

Title:_____________________________          Date:                                                                                                                                      

""Dear Client,

By signing this declaration you understand that your broker is probably not qualified to give you the best deal possible.  Take a good, hard look at what they're doing and be aware that they're small potatoes. 

Also, these fees may be suspect.

Are you sure you really want a loan, anyhow?  Are you positive?  Have you not spoken to all of your friends and family before making such a dangerous decision?""

Okay, a little dramatic, but I can just see your clients reading that disclosure and going into a state of panic.

Many companies are now requiring these Well, Chase, etc...get to know these disclosures very well because they are very confusing to clients and need to be explained very well and it is not easy most of the time to get them to understand!!  Each one of them is a little different also.

It sounds like an opportunity for a webinar on how to walk your client through those disclosures and ,in the end, still cheer for all of your efforts and knowledge and for their loan. 

I added this disclosure to my list of disclosures almost a month ago.  You need a line of credit with a lender, otherwise you're stuck using this.  I've never had a problem selling my fees, hopefully I don't start.

I also have them signed right away since July they have been in with my broker package. 

Some clients have a very hard time understanding them though even after you have gone through the whole sheet with them.  I have found that the easiet way of getting through them with a client is to have them side by side with the GFE and showing them that they are the same paper in reality. 

Your mtg broker is not qualified to give you the best rate therefore call our retail center and we will give you a higher rate and charge you the same fees

That sounds more like CW

Did I mention I hate CW?

Isn't this very similar to the version of this that came out when this first got on the radar months and months ago?

Didn't care then...

Don't care now...

At the end of the day, if my clients trust anyone more than me in this process, I'm not doing my job.

That form was supposed to be implemented by HUD in their August Update.  However, broker groups (i.e. CAMB) aggressively campaigned to show that using that implementing this form will cause more confusion for borrowers and will also cause borrowers to pay more fee's.  I know they got rid of it and no longer require it.  HUD did more studies and did determine it is detrimental.  I am wondering why lenders are implementing this.  Just another example of retail banks (CW, WAMU) bad business practices (exorbantant fee's and bait and switching) in the past and brokers getting the blaim.  Thanks Andrew Cuomo, you sure do know a lot about the mortgage industry. 

How can it be that one company, Countrywide, can be so horrible.  They are going to drag down BofA with them.  My 2 cents.