It saddens me that now a mortgage professional (Broker or Banker) has about the same credibility as

[Moe Bedard]

I guess as an industry we’ve earned that reputation. We sold too many of the wrong types of loans to the wrong types of people. There were too many crooks out looking out for their own paychecks, and not their customers best interests.
Its really a shame because mortgage transactions are usually the biggest financial transaction the average American makes. Mistakes in this industry can really damage peoples lives. I guess the broker charging 4+ points and YSPs didn’t care about anything but their own paycheck. Didn’t the phrase caveat emptor originate with real estate transactions? I guess not much has really changed in the past 2000 years… Illuman23 December 28th, 2007 at 3:28 pm

Welcome to mortgage brokering and banking 2.0.

Business will never be the same for the mortgage industry. There is a lot of self cleansing going on in this once very lucrative, easy to enter field and also a lot of debate as to what the future holds for the mortgage business.

One thing is for sure. The image of the mortgage professional has been tarnished and what was once a respectable and rewarding career, has been viewed by many in the public as akin to being a used car salesman.
An image that will be very hard to shake in a society that likes to place blame and point fingers.

“From Art Of War…” HE WHO CONTROLS THE GOLD..CONTROLS THE LAND” big banks and wall street controls the gold right and probably forever so they can do what ever it is for them to survive and be in control.” quy December 28th, 2007 at 2:33 pm

Wall Street and lenders control the gold that they in turn gave to their whipping boys (mortgage brokers), and now that the subprime gold has dried up and turned into subprime coal, these same gold hoarding mongrels have now thrown the mortgage professional under the subprime bus.
Talk about Hypocrisy. (the act of condemning another person for an act of which the critic is guilty)

“The greed was two part. The hedge funds and the rating companies. Take a look at there earnings. Just look at the top five. Let me ask you guys and girls a question. Was that not a form of brokering?You think with all of the brilliant minds in Washington they could see the trees through the forest?”Doug December 28th, 2007 at 8:41 pm

It seems that lenders and Wall Street had their way with brokers, made their money, and now that the heat is on, they have washed their hands clean as they now break bread with the US Secretary Treasurer, Hope Now, the President and various high power non-profits such as NeighborhoodWorks and NACA, where many of these lending executives share a seat on the board of directors.

They helped create this massive mess and now, they get to help clean up their mess with the Bush Administration’s Hope Now and these powerful non-profits that have been and will be allocated hundreds of millions, if not billions, in funding for foreclosure prevention.

Most of these non-profit entities despise mortgage brokers and would like to see that this industry never sells a loan again.

While I am a strong consumer advocate and a huge advocate of non-profits, I feel that an ethical and honest mortgage broker also does their community a good service and is very valuable in the market place. But I know one thing for sure, the future doesn’t look so bright for this industry.
Especially now that the non-profits are in the mortgage game.

This is something that I think everyone in the mortgage industry is not getting. The day of the non-profit has come and it looks like they might very well be taking over this industry for good.

This is a Moe prediction and you heard it first on LoanWorkout.org. (I’m ready to get flamed, bring it on!)

Will this be good for the people of America to have options for mortgages where there is no greed (commissioned salesperson) in the equation? Many predict a plain vanilla loan society in the future, where you can just pick your mortgage off a menu based on FICO and LTV and proceed to closing. Why would a broker be needed if that is the case?

Billions of dollars in financing is being offered to organizations like The Neighborhood Assistance Corporation of America. (”NACA”) is a non-profit, community advocacy and homeownership organization. Yes, BILLIONS!

This is a great organization operated by one of the most aggressive consumer advocates and anti-predatory lending pioneers in the world, Mr. Bruce Marks. Trust me, you do not want to see this man or his organization protesting your office.

The incredible NACA mortgage allows NACA Members to purchase or refinance homes with:

• no down payment,
• no closing costs,
• no fees,
• no requirement for perfect credit,
• and at a below-market interest rate.

Everyone gets the same incredible terms, including the below-market interest rate, regardless of their credit score or other factors. NACA also provides free, comprehensive housing services. NACA counsels Members into the extraordinary NACA mortgage using character-based lending criteria that takes each Member’s circumstances into account to determine whether they are ready for homeownership and what they can afford. This is in contrast to risk-based pricing where people are often given loans they cannot afford while brokers and others make tremendous fees and profits.
America’s Best Mortgage!
One Mortgage Product - $10 Billion Committed5.375(as of 12/28/2007)
No Down Payment, No Closing Costs

How the hell is any mortgage broker or banker going to compete with the above terms? They’re not!

Ladies and gentleman, NACA may very well be the future of the mortgage industry and if you do not believe me, then you might as well keep your head in the sand because the sky will fall where you are standing, sooner rather than later.

I write these posts for the ethical and honest mortgage professional (the few the proud), to open your minds and free your souls. I understand you all have families and are people too. I do not wish suffering for anyone. While I am a die hard consumer advocate and an anti-predatory lending advocate, I am also a people advocate that wants the best for all law abiding citizens.

Stay optimistic but please read the negativity because most of it’s real, very real. Most optimists are hopelessly not realistic and most realist are negative. Try to find balance here everyone. How about optimistically real?

This is just one more news angle that is not being reported on. Maybe I can open your eyes to see the changes that are happening in this business that you all do not see from your side of the fence. While you may not agree with my views and observations, at least you have taken the time to read my blog and see a different point of view from the typical status quo that is being reported on every other mortgage blog on the web.

More from NACA;

The NACA homeownership program is our answer to the huge subprime and predatory lending industry. NACA has conclusively shown that when working people get the benefit of a prime rate loan, they can resolve their financial problems, make their mortgage payments and become prime borrowers. NACA’s track record of helping people who have credit problems become homeowners or refinance out of a predatory loan debunks the myth that high rates and fees are necessary to compensate for their “credit risk.”

Started in 1988, NACA has a tremendous track record of successful advocacy against predatory and discriminatory lenders as well as providing the best mortgage program in America with $10 billion in funding commitments. NACA is the largest housing services organization in the country and is rapidly expanding by growing its existing 30+ offices, headquartered in Boston, MA, opening many new offices nationwide, and expanding the servicesit offers its membership. NACA’s confrontational community organizing and unprecedented mortgage program have set the national standard for assisting low- and moderate-income people to achieve the dream of homeownership.

As I said in my previous blog post titled, Are Mortgage Brokers Ancient History in 08?, “One things for sure, the smart people that are left in the turbulent mortgage industry waters are devising an emergency back up plan and exit strategy because from the looks of things, the horizon isn’t looking to sunny.”

NACA, coming to a town near you! (good for consumers, bad for brokers)

from my blog http://loanworkout.org/2007/12/29/it...-car-salesman/

[captdave]

I have been a mortgage banker and financial credit analyst for many years. I have seen so much graft and fraud, it is dispicable. If you want to point the finger, most of the mortgage brokers in our country whom came into the industry over the past 5 years hurt us. They sold mortgage products to folks that could not afford them, sold the programs that were easiest to sell with the most profit and, sold a "bag" of goods to the banks whom funded the deals in the wholesale channels. I also fault the banks for then selling these loans along the secondary channels where they ending up with hedge funds where they were discounted for more profit, yes, to the banks.

In many cases, loan officers whom work for a "lender" and not a broker or "correspondent" (these have no reps and/or warrants), will write a better loan and one that will perform. We now are seeing a bigger push to underwrite the loans traditionally. This practice has started way too late. Kind of like closing the barn door after the animals are out!

Unfortunately, many mortgage brokers are akin to used car salesman.

[Moe Bedard]

You got it Capt.

Too much greed, too many people in the business that never should have been in it. The fraud is more than I think anyone realizes. I would say it has to be at the 50% range. Meaning if you meet 2 LO's, one will be good, one will be shady. So, in turn, same goes with broker shops and the loans they churned.

This will change lending and the way money is borrowed forever.

[Bella]

As a homeowner, I tried to refinance our arm in 2005 2 times. Both times I was told to get an option arm and both times I said no way!
The pressure was intense.
I admit I did not really shop around, but even when I asked for a fixed loan the neg ams were pushed...

Now, I have an arm that originated in 2004 and due to reset in 2011. I put 100K down, but, the equity seems to be gone now. I am looking to refinance to a fixed but I may need to bring 11K to closing...

[gigi in fla]

Unfortunately there are one too many greedy brokers out there going down the tubes. I, for one, will never, ever go through a mortgage broker again. Directly to the lender, and that will avoid the infamous "kickbacks" which many of these unscrupulous brokers used to put people into the ARM loans from hell. I am going after the broker in my purchase who lied, cheated, and basically did just about everything corrupt she could do in our transaction. She was referred to me by an attorney I worked with at the time, and this broker was her sister's best friend. Naturally, I thought, she won't screw me over.....ha! She did not have an executed mortgage broker agreement (violation); she accepted a YSP (kickback) - (another violation); she brought a forged mortgage application to the title company several days after we closed (criminal conduct); shw switched the terms and rate on us from the fixed rate we applied for to the infamous 2/28 ARM and HELOC (major TILA violation). We had her investigated by the Office of Financial Regulation and they found she violated Florida Statutes. We sued her for fraud, unfair deceptive trade practices, forgery, etc. together with the lender and appraiser.

Until her broker license gets suspended and/or revoked, I will not stop going after this witch. I just found out about the forged document 10 days ago, and the Sheriff's office, Office of Financial Regulation and F.B.I. are now involved.

Fight for your rights!

Gigi

[SoCalGal]

Gigi, do you not know that the same "yield spread premium" is paid to loan originators working for mortgage bankers if they offer you an interest rate above "par?"

Most people don't know this, so it does you no good to go "direct" to a mortgage banker.

Yes it does good to go to Direct Lenders, SRP stays with the home office of the Direct Lender, the Loan Officer only gets percentage or 50bps of the "overage" on premium pricing of the rate....So the Direct Lender is far safer.

We cap the yield to the transaction in the good Mortgage Banking shops/Direct Lenders to 2% no more than 3% to stop this kind of behavior in it's tracks. My shops are 2% and that is it. No more than 1% origination and no more than 1% pricing premium, the LO is only going to get .50% of that premium and .50% of that origination fee. That is old fashioned mortgage banking. We are mandated to the effect that with audit by the outside agencies and such to the extent that anything more than that is Predatory and just plain wrong. FNMA only allows a 5% max on fee income and FHA 6% on fee income. We are so paranoid that we limit a 2-3% industry wide due to the affect/effect of loosing your Eagles and Delegations.

The SRP is paid to corporate for the privilege of selling the loan to FNMA, FHLMC or GNMA or for that matter to the pass through investor....i.e. US Bank, GMAC, whomever....(Service Release Premium). That SRP funds the costs of doing day to day business and does not filter down the line to the Loan Officer....never should.

Direct Lenders due to the audit issues are far more circumspect and conservative in their payouts to LO's and as such do not participate in the wholesale plunder of the borrower.

[mreedlaw]

My top 10 "Not All" List for this thread (in no particular order):

1. Not all people are bad
2. Not all mortgage brokers are bad
3. Not all direct lenders are bad
4. Not all title companies are bad
5. Not all underwriters are bad
6. Not all borrowers are victims
7. Not all people will appreciate each and every post on this forum
8. Not all posts where I try to be funny are acutally funny
9. Not all origination fees are inherently evil
10. Not all people will like this top 10 list

[gigi in fla]

Had the YSP been disclosed to me, and it was not, that would be a different story. The GFE only shows the fee we paid to her, it does not reflect the YSP paid by the lender. Additionally, the mortgage broker did not have a mortgage broker agreement and therefore, should not have even received a fee. We applied for and were approved for a 30 yr. fixed rate mortgage. Both the lender and the broker failed to notify us prior to closing, either verbally or in writing, that they switched us to an Adjustable Rate Iterest only loan and HELOC. We arrived at closing on a Friday at 4 p.m. and got the wham, bam, thank you mam deal from hell.

[JacMac]

Originally Posted by mreedlaw

My top 10 "Not All" List for this thread (in no particular order):

1. Not all people are bad
2. Not all mortgage brokers are bad
3. Not all direct lenders are bad
4. Not all title companies are bad
5. Not all underwriters are bad
6. Not all borrowers are victims
7. Not all people will appreciate each and every post on this forum
8. Not all posts where I try to be funny are acutally funny
9. Not all origination fees are inherently evil
10. Not all people will like this top 10 list

That's a very good list!!!

I've never been a fan of the blame game, and in relations to this topic I think there needs to be a distinction made between what someone may be to blame for and what someone is responsible for.

Here's a good illustration. If God forbid I learned that my child had been molested I would be, I'm sure, tempted to commit murder.

If I went through with it, I'd most certainly be responsible for the death of the culprit but would anyone BLAME me?

The professionals who worked in the industry who contributed to what is happening now do in many ways, and on varying levels have responsibility for what has happened, as do the borrowers as well.

Now whether or not any of us would Blame someone depends on the unique circumstances of the borrower and the professional -- and it really, for me, comes down to ethics.

[gigi in fla]

I forgot to mention that last week I received two Administrative Complaints filed by the Florida Dept. of Bus. & Prof. Regulation against the appraisers who botched the appraisal of our home. The State found they over-estimated the lot size by 700 sq. ft.; the square footage under heat and air by 228 sq. ft.; used comps two miles away instead of comps available under one mile away, and yes, they threw out any and all evidence as to how they calculated the square footage, values, etc.

I agree not everyone in the industry is bad and every circumstance is different, however, in my case we dealt with a horrendous broker, appraiser and lender. The broker was found guilty by the State for violating Florida Statutes (failure to have a mortgage broker agreement and changing terms and rate without notifying us); the State has found the appraiser guilty of violating Florida Statutes and Rules of USPAP per above; and the lender is under investigation by the State & F.B.I. in my case.

[mreedlaw]

Gigi, in reading your posts, it certainly does look like the appraiser and broker were to be blamed.

The tone of my post was reflected toward a now-banned member (SoCalGal) who seemed to have issues with what this forum is about -- To assist homeowners who were victimized and who could use some assistance.

You have my sympathies, and I am sorry if there was a mis-communication in which you thought my list was directed at you, which it certainly was not.

Thanks, Michael

[penniandmondo]

Hello,
The NACA is this program one you would recommend? I was on their web site and sure would like to get refi before july 08 or I get behind due to increase of adjustable.
Also, When you send out QWR, did you say to send copies to Title company, Broker ect.?
Hope everyone is doing well, everyone must not let the stress of this mess make you sick physically.
Thanks

[gigi in fla]

Michael:

Sorry about the confusion as well! We have been through the ringer with these people -- it's taken a while but the truth is finally coming out. It is good to know, especially through this site, that there are decent people out there and not all those involved in the mortgage industry are bad.

Take care,

Gigi

[penniandmondo]

GiGi
What and were and who was your broker in fl. Same problem with our loan.
would love to see them in trouble for the Bait and switch tacts they have been using here in Florida. I have sent emails to our Govenor about this problem, along with the insurance issues, and the only reponse I get is that the new insurance law with save us a about two hundred a year. I told him that about what we spend on food for our family of six in a week.
Between $1600. more a year for property insurance and high taxes we are drowning here in Florida.
Hope hurricane season this year is nothing.

[gigi in fla]

The broker was in Altamonte Springs (near Orlando), Elite Mortgage Financing. The broker was Michelle Knight, and the company is no more, but her broker license is still active. I'm working on having the State take her license away since we got the findings about the appraiser - the broker, lender and appraiser all knew our home was not worth even the mortgage amount and they fudged figures to push it through.

You need to file complaints with the Dept. of Bus. & Prof. Regulation against the appraiser; Office of Financial Regulation if it is against the broker and lender.

Appraisers and brokers have E & O policies (errors and omissions) and you should send a certified letter to them asking for a copy of their E & O policy. They have 30 days in the Sate of Florida to provide you with a copy of the policy. Check your appraisal and look at the documents towards the back of the appraisal and see if the appraiser attached a copy of the dec page for the E & O policy. Then file a claim against these policies.

Good luck to you!

Gigi

[mreedlaw]

Gigi - check out Sabine's (JacMac) portion of the forum where she posts those "extra special" folks who have wronged borrowers...right Sabine? Sounds like Bo from World Mortgage is going to have a little company today

[gigi in fla]

Thank you for the info! Going to check out Sabine and what she has to say....thanks again!

To: Pennie...NACA is a consumer agency that can refer attorneys, for refinances we heartily recommend Direct Lenders....Your Credit Union, Your Bank, someone that is already familiar with you and not a Broker....The Direct Lender is curtailed by Agencies that they report to as to how much they can charge and they are audited on a regular basis to determine that they are not predatory or exceeding the acceptable limits for fees and charges.

Usually the quality of assistance that you get there is far superior to a Broker they require their people to test and be knowledgeable of the programs offered and able to offer strong financial advice that would fit your needs.

I can not begin to stress, stay away from the Brokers particularly now as every deal is their last deal and they need to make their house payments for the next couple of months and it should not be due to your loan. This is no joke, they are charging more than ever to make up for the loss of business over the last year or so.

Please, please especially if you have a credit union, use a direct lender.