Fees to brokers???

[6wolverines]

Just a quick question on what a "reasonable" fee to a broker would be....

Our "loan" when we refinanced was for $139,000.00.

Broker origination fee was $4685.00 (or 3.3705%)
"Processing fee" to broker was $895.00.... another
Broker fee paid by lender (POC) was $695.00....yet, another

All told...$6275.00..... QUADRUPLE !!!!!!!!!!

What exactly is the purpose of a "broker fee paid by lender" and what is it's purpose? To weasel us into a slime-ball loan? Was this our fee for allowing the broker to "screw us blue"!!!!????


Char

[Andrew]

The broker fee paid outside closing is the YSP (Yeild-Spread-Premium) That effects interest rates and such.
The yield spread premium (YSP) is the cash rebate paid to a mortgage brokerbased on selling an interest rate above the wholesale par rate that the borrower qualifies for.
For example, If a mortgage broker offers a borrower a loan of $100,000 at an interest rate of 6.25%, and the parrate is 6%, the broker may earn a YSP equal to 1.0% of the loan amount. This $1,000 fee is paid by the lender directly to the broker as a "rebate." The mortgage broker earns "one point" directly from the lender "POC" (Paid outside Closing). Although the borrower is not charged the fee directly, the borrower does pay the fee indirectly by accepting a higher interest rate in exchange for lower fees.
In the U.S., mortgage brokers are required to disclose YSP as a fee "POC" (Paid Outside Closing) on page 2 of the HUD1 Settlement statement, inside the margin, away from the column marked "Paid from Borrower's funds at Settlement."
YSPs as a financial instrument are not controversial. What is controversial is how they are applied, and how and when brokers and lenders have to disclose their existence and their amount to the borrower.

[JacMac]

My broker got a loan orig. of 10K
about anothe thousand in miss. fees

and then almost got $14k in YSP -- all together almost $26K, now that's outragous!

[elpjohnson]

WOW!!!!JacMac that is a lot of dough! Unbelievable!

[6wolverines]

JacMac.....

Let me just say one thing.........."BARF"!!! Oh, and #$%#@$#%$&%^% and ^^&%??&*^%$#@$^%$!!!!!!!!!!!!!!!!!!

And !!!!!!!!!! !!!

Now that was one lucrative day for a scum-sucking Broker!!! Dang, and I thought it paid to be honest and forthright!!!!

Char

[Moe Bedard]

This is the most common abuse in the mortgage brokerage industry. Th facts are that the guy who did JacMac's loan did not work any harder than the guy who did Char's loan. But one made $4k plus and the other made $24,0000!!!! It's sick, you're all right.

This is what I feel needs to change. My thoughts are that there should be a flat fee on each loan for processing and commission. That fee should be in the $2-3k range MAX! on most all loans.

What these brokers both did on each loan is charge the maximum allowed by law. I have seen $100,000 plus commissions on one loan and a 19 year old fresh out of high school did it. Keep in mind that the broker got 75% and the kid got $25k and immediately went and bought a 745 BMW with 20 inch rims.

The broker is now facing criminal charges and tax evasion. The loan officer is working at IN N OUT where he should have been all along.

Now multiply this exact same thing by millions of loans and you see what our country is facing.

[6wolverines]

Again.....BARF!!!!!!!!

IN & OUT......right where he belongs. "I'll take a 6-pack of Bud and a pack Marlboro Lights 100's"!!!!! HeeHee!! Serves his snotty a$$ right. How's he look driving up to work in a fancy car and then strapping on his work smock and a badge that says "Play the Lotto...Odds are you'll Have fun!!!"

Char