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     | Saturday, June 10, 2000 - 06:51 pm  Attn Senator: In your June 6 posting, you mentioned that you were "working with a broker who you found through this site". Would you please reply with the name of the person you are working with as well as your comments re: his/her level of service? I had posted a message on May 22 regarding Randy Johnson of Independence Mortgage Co., to which Christine replied. She had some favorable comments to make regarding Mr. Johnson as a broker but her "less than favorable" insights spoke more strongly. We've searched the web for direct lenders, who all pretty much offer the same rates. What we're looking for is good service. Per Christine's suggestion here at Bayhouse and for other reasons, we prefer to work with a qualified and experienced mortgage broker; one who will offer assistance, honesty and clear answers (and who won't mind filling out Christine's broker questionaire  We think we've found one such broker but perhaps it wouldn't hurt to compare with the person you are working with. I would appreciate your earliest reply here. Thank you. ps To all who are contributing to this string of conversation, sorry for the interruption in your discourse. pps To all, feel free to mention any mortgage brokers you'd care to recommend. I appreciate anyone's input.
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| | Saturday, June 10, 2000 - 07:42 pm Joseph, you should always mention where you are and what type of loan you're looking for. I *think* you're in California, and I believe Senator's broker is in MS. Not a good match! This is very important because mortgage brokers not only need to be licensed where they broker the loans, but regional lending requirements vary and it helps greatly if the broker is also familiar with local real estate customs.
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| | Sunday, June 11, 2000 - 03:17 am I found that doing my own research has been far more valuable than just relying on the broker. I found a company that (from research) could address my particular situation with a mortgage available for those who had been forced into a ch7 and I typically use that to judge a broker's ability. When he tells me that he can't find anyone to underwrite, I mention the name of the company and ask if he's familiar with it. By the time he tells me he contacted them and they can do it, I probably am in search of a new broker. Cardinal rule in life: No one is more interested in your case than you. Now the question is should you pay a broker a fee when you mentioned the name of the company who will underwrite you.The broker from this sight is honest but that doesn't abrogate your responsibility to do your homework. I'm debating whether to give him the business. I'm really not being entirely fair to the broker--my situation is a paradox. I finally have a decent income again after my American dream was destroyed by corporate greed and a major dysfunctional boss taking antidepressants and antipsychotic drugs for his mood swings. I live in fear of being reorganized again. It has affected every decision I make and has ruined my relationship with my spouse and put fear in my children's hearts. It makes me not trust anyone anymore, realizing that in business and life everyone has an agenda, especially in business. My credit scores are very poor and i am not even a year from date of discharge. I am asking the broker for the moon and while he may be good at finding mortgages for bad credit, he isn't necessarily good at raising Lazarus from the dead. I will post his name if he can work a miracle. If he turns out to be bad, I'll post it too. Otherwise he will remain a nameless person in the pack of real estate hounds. Don't give them a biscut without making sure you won't be bitten.
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| | Sunday, June 11, 2000 - 10:19 am Christine and Senator, Many thanks to you both for your quick reply. Christine, you guessed right; we live here in California (West Los Angeles area). I especially appreciate your prompt answer because we are being "asked" by our new apartment owners (Archstone Communities) to vacate within the next three months because they want to demolish and rebuild on the site (3x the number of units, I may add). You may have a number of questions/comments regarding our situation but, believe me, you don't want all the details about the "corporate greed" (as Senator would put it) that is involved in this matter. For over nine months, a very tiring campaign has been led to stop this development, especially because approximately (25) senior citizens on fixed income will be displaced. We're at the point where an appeal to the LA City Council will take place because the Dept of Planning has sided with the developer. When will this city ever say enough! to urban sprawl? Maybe when we are able to sneeze and have our neighbor say gesundheit! Maybe when every last blade of grass has been poured over with concrete. And it is curious how this rebuilding is permitted in some areas of the city and not others. Moreover, we live in a complex that was built back in 1949 and has been maintained in ideal shape for decades. So much for preserving heritage and history! We are continuing our fight but I'm concurrently working on Plan B (i.e buying a condo or townhome) and the information here at Bayhouse has been enormously helpful so far. If any BayHouse readers have any recommendations for a reputable mortgage broker here in California (or, with luck, right here in LA), I'd appreciate hearing from you. I'm close to working with someone now but some "comparison shopping" wouldn't hurt. Thank yo. ps Christine, if I'm taking the conversation off on a tangent, feel free to repost this topic of mortgage brokers where-ever you see fit on the Bayhouse site.
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| | Sunday, June 11, 2000 - 11:25 pm Joseph, you bring up a whole bunch of interesting issues. Right away I have to warn you, townhouses and condos are NOT very sound proof. Don't buy a condo or townhouse. One of the first things I did on the net back in 95 was talk a reader out of buying a condo/townhouse. He thought that was all he could afford. Yet, a couple of years later he moved into a great house in a very nice San Jose neighborhood, with only 5% down. It's nice to be reminded of such a well planned and extremely successful transaction. He worked with a buyer broker who paid me the referral fee, most of which went back to my client after closing. Some of it was my consulting fee. I remember bringing the check by their new home, seeing it for the first time inside and realizing what a fantastic deal they got. After the initial consultation I mostly assisted with the buyer broker selection and answered loan questions. Occasionally he checked with me about statements made by either broker when he wasn't sure whether they were bs'ing him. And we did a drive-by on two properties he got to choose from. The fact that he HAD a choice is truly remarkable, in that HOT San Jose market while buyers were outbidding each other and multiple offers were the norm. He ended up buying at about 10% below market. His broker was persistent and knew the market, he truly earned his money. The seller ended up paying for a lot of work in one of the bathrooms. The property had been very difficult to show, it was a rental and was not well marketed at all. Access was difficult. The buyer broker wasn't perfect either, my client had to make sure all the little details were in the contracts. And of course he had to do a lot of looking on his own, he got the new listings via e-mail or fax. The mortgage broker was on-line, marketing via a rather extensive and quite useful web site as well as a news letter. Unfortunately, the service wasn't that great. I can't remember the details, this was about 3 years ago, but there were definitely UNEXPECTED problems with the loan. I was glad I hadn't recommended the guy. Anyway, do yourself a favor and don't buy a condo/townhouse. Even better, get out of LA! Don't know how people can live there, I got a sore throat just driving from AZ on 10 via Pasadena over to 5 north to SF. Happened every time, even when I didn't stop and kept the windows closed. Short of getting out of So Cal, try to keep your current place, it sounds like they really shouldn't tear it down. It's too bad that I've never found any other pros who offer COMPREHENSIVE purchase consultations like I did. Joseph should be able to find out where he stands, what he can afford, how he could improve his credit (scores,) how to get down payment, and what first-time buyer programs are available. I was really big on the MCC program but don't even know if it still exists. Senator, don't be too hard on your broker. There are literally thousands of lenders, and all too often they don't come through. If this posting wasn't so long already I'd give you some examples with more specifics. Why don't you post which lender you found and WHAT they'll do? It would sure would help a lot of other readers here if they actually do make those loans at REASONABLE rates and terms. And, you remind me of my client in the deal above. You're persistent, you got brains and you check things out. Nothing's ever easy, and yes, it also takes a little LUCK. You'll get there, just be patient.
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| | Monday, June 12, 2000 - 07:52 am Thanks Christine. I would've answered earlier this a.m. but bad allergy day, could hardly see. There is a firm called First Franklin which will ignore your ch7 ("no seasoning required"--which in real estate lingo means you don't have to wait a certain amount of time following discharge date)as long as you have 10% down and credit scores of 600. I am there on one, and the lawyers are working on the other two CRAs. I will post their progress or lack thereof. First Franklin will even do 100% LTV (loan to value--as in no money down) if credit scores are 640+. I would highly recommend that viewers go to www.mortgagestats.com (I think that's it--but don't trust me, I'm not a computer expert)and their discussion group called "Grapevine".You will be amazed at what is available and what sleaze is out there masquerading as help. Take care.
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| | Monday, June 12, 2000 - 12:14 pm Thanks! First Franklin. Hmmm, I do remember a First Franklin that I wholesaled to, but they were an A lender at the time. I posted at the Grapevine, will update if I get more info. Am really curious about their RATES.
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| | Monday, June 12, 2000 - 11:07 pm Christine, First Franklin is a "B" paper lender now BUT they have remarkable 100% financing for even the poorest credit. I placed a loan there where the borrower had been discharged Chapter 7 BK just three months previously (however, his FICO score withstood the onslaught of BK and he emerged with a 640). There is an add-on to the rate of .375 for any BK not seasoned at least three years to compensate the lender for its perceived additional risk in lending to someone fresh out of BK.
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| | Monday, June 12, 2000 - 11:11 pm Christine, the Mortgage Credit Certificate (MCC) program is alive and well! But there's now only a 10% credit to everyone (remember it used to be 10-20%). Most brokers charge an extra fee to include an MCC with a loan package. It requires significant additional paperwork and, as such, the extra fee is earned.
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| | Monday, June 12, 2000 - 11:21 pm I would like to respond to Senator's comment about whether he (Senator) ought to pay a mortgage broker since he (Senator) found the lender suited to his situation (marginally qualified borrower). As a mortgage broker, I would say, yes, of course he should pay the broker his fee. There's more to securing loan approval than locating the lender. If locating a lender is all that's required, there are locating services for that simple function that charge only $150-200. Then you're left to your own devices to package the loan properly and effectively so as to ensure loan approval. Packaging the loan is where the metal meets the road! The ability to "think like an Underwriter" is how I earn my fee. I do it right the first time so that I don't get, instead of an approval, a prior-to-funding condition list as long as my arm!
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| | Monday, June 12, 2000 - 11:29 pm I'm a mortgage broker (and a darn good one, I like to think!) and I don't shrink from challenging loan files. But just as most of you would like your broker to provide you with transparency as to pricing, etc., so, too, do I require transparency from my borrowers. I NEED to know (I'm not just being nosy) if you have anything in your financial background that may show up to bite us all in the butt (and the list of such potential landmines would fill a couple of hard drives). So when I take on a marginal file, I do a VERY thorough borrower interview. If a borrower is unwilling to be forthright about his circumstances, I really can't risk quoting one point if the file ends up being a nightmare from which it seems I can't wake up. Been there, done that.
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| | Tuesday, June 13, 2000 - 02:35 am the more I thought about it, the more I realize that catherine is right. it is all in the packaging that makes the difference and the broker should be compensated.
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| | Tuesday, June 13, 2000 - 06:53 am Would someone please send me the URL for the "Grapevine" discussion forum at mortgagestats.com. The DF isn't mentioned at their site. Thanks.
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| | Tuesday, June 13, 2000 - 10:38 am Try this URL, Catherine http://www.mortgagestats.com/cgi-bin/grapevine/rendermain.pl?new#read Very much appreciate all the info, thanks so much! And here is the direct link to my posting on First Franklin: http://www.mortgagestats.com/cgi-bin/grapevine/renderthread.pl?thread=2482 Got quite a few responses, mixed reviews, and some more leads: "NovaStar or New Century. NovaStar has been touting some agressive programs here lately. Like 97% LTV with a 575 FICO." And re Senator's finding the lender: I think the broker should give him a break on the fee. Apparently the broker really didn't know about First Franklin after looking for a lender, I think he had already been working on Senator's loan for a while. It is also time consuming getting set up with a lender, getting to know their guidelines and procedures. Having this new funding source should increase his business, since he couldn't fund those loans until now. Catherine is right, packaging the loan WELL is most of the work.
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| | Tuesday, June 13, 2000 - 09:15 pm I don't think the broker should give him a break on the fee. The broker should receive his agreed-upon compensation. After all, brokers aren't infallible; no one is. If a stockbroker calls you with a stock recommendation, and the stock declines in value, does the broker refund any of his commission? Heck, no. If the mortgage broker recommended a loan program, and then found a better one, should the broker then get more fee? No. Everyone's a team in the effort with the goal of "good, better, best . . . never let it rest . . . till the good gets better, and the better gets best." Senator cannot get the loan directly through First Franklin (they're wholesale only), so just give the broker his fee, for cryin' out loud. He put the package together . . . competently, I presume. If unforeseen obstacles had caused the loan to go sideways (a common occurrence), the broker wouldn't have increased his fee, even though his work increased. If he's any kind of professional at all, he would've hung in there and guided the loan to a conclusion. The mortgage arena changes daily--by the minute even--and when people start changing the price and terms (not the rate, mind you; no one can predict rate fluctuations sans a rate lock) in the middle of a transaction, you have a shaky foundation for a business relationship, in my opinion. That's why its unconscionable for a borrower to double-app, thereby allowing two mortgage professionals to work when only one gets paid. Upfront mortgage brokers deserve upfront customers.
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| | Wednesday, June 14, 2000 - 05:04 am The broker is an honest,hard working, competent individual and deserves his fee. I was only tweaking everyone to promote discussion. Catherine hits the analogies correctly regarding compensation. BTW, additional posting to Christine's inquiry on grapevine has uncovered a firm who will do 100% with 1 yr out of ch7, several lines of credit and FICO of 575. the lender is oxford capital. This is excellent so far. Now if we can just have those attorneys work their magic with the CRAs. Thanks to all. Like all the input.
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| | Wednesday, June 14, 2000 - 08:16 am Senator, thanks for acknowledging the ethical component in the process of obtaining a home loan. But the fact that it even enters into the equation points out that there are two parties to the mortgage broker tricks and scams that take place. Which came first, the chicken or the egg? In other words, are rogue brokers rogues because they're basically dishonest people, or do they become that way because they've been kicked in the groin so many times by prospective borrowers and THEIR tricks? I can't tell you the number of times I've been used, abused, exploited and jerked around by people who had no intention of using my services or, after allowing me to get them worked up into lendable condition, decided (now thinking that they walk on water) to go somewhere else for an eighth of a point. But I persevere in providing the best service I can to people truly committed to the home buying process. It continues to be gratifying for me. Despite the seemingly effortless process of loans online (what pure marketing bull hyped by online lenders!), the art and science of getting loans approved (particularly for marginally qualified individuals) remains the province of competent, knowledgeable, hard working mortgage brokers. Only a small percentage of people SHOULD BE turning to the Internet to get their loans. Here is a description of such an individual: 20% down, 2+ years at the same job, 6 months reserves (savings) in the bank after close of escrow, comfortable debt ratios, FICO 680+ and buying a property that will pass minimum health and safety standards with flying colors. Does this describe many people that you know? Me, neither.
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| | Wednesday, June 14, 2000 - 11:26 am So true. The problems consumers face is that it's nearly impossible to determine the compensation, competence and ethics of a broker. I can definitely understand why borrowers end up going with whoever sounds best and promises a no hassle easy loan. Senator must have spent ENDLESS hours searching for and researching brokers and loan programs. It's not a problem limited to brokers though. Looking for a dentist got so frustrating I finally just drove to Mexico where I could get everything done in an hour and they were friendly and courteous. And I'll have to post in a separate topic on lawyers. I think it's awful that California brokers are prohibited from getting paid unless the loan closes. There are advance fee agreements but they have to be approved by the DRE and it's a hassle. Besides, I don't think borrowers should PRE pay, but they should pay for services and consultations received. The law also forces brokers to get people into loans that are not necessarily good for them, but if a broker recommended NOT doing the loan he wouldn't get paid. AND they repealed the regulations requiring broker fee disclosures. The entire business is so incredibly corrupt, and I'm NOT talking about the scummy little broker who generates new 1040s for a couple of extra points. When mortgage association presidents teach at Cal State University how to ** low quote **, how can any honest broker survive? I got SOOO tired of my clients bringing in the ads with IMPOSSIBLE rates. And every time I called I found that it was a misprint or some kind of error. I really believe that real estate and mortgage brokers *should* be professionals just like accountants or lawyers and should be entitled to compensation for their work. And while real estate brokers more frequently work for an hourly fee, Cal. legislators decided not to allow brokers to get paid for their expertise. Obviously, there was a reason, lots of fraud by brokers who took upfront money, promised a loan, and then didn't do a thing. There is an interesting article on disclosures at http://www.mtgprofessor.com/C%20or%20A%20-%20Mandatory%20Disclosure/Is%20Mandatory%20Disclosure%20Unfair%20to%20Brokers.htm I look at California lending laws and I find it hard to believe that legislators can be as stupid as they act. The BANKS get to charge NON refundable application fees for doing NOTHING but taking the application. Catherine is 100% right about the many borrowers playing games. I think the only solution is to legalize broker compensation and to require complete fee disclosures at the time of application.
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| | Saturday, June 17, 2000 - 04:50 pm Just tuned in this evening and feel that, since I initiated this string of discourse on mortgage brokers, I'd jump back in. Here are a few questions and comments: 1 To: Catherine Coy Do you still work as a broker? If yes, do you work here in Califoria? I like what I hear from your comments so far and I especially agree with both parties (borrower and broker) being "up front" with one another. It's been an unbelievably long road to actually making contact with a mortgage broker who sounds fair and reputable. Not to say that brokers aren't honest people, I'm speaking only in the sense that "mortgages" are so easy to find on the Web whereas "mortgage brokers" provides 0 search results (am I simply using the wrong search engine?) And the friends and family I speak with about their mortgage experiences all speak of working with direct lenders. If you are still in business here in CA, perhaps we could talk further about your services (by phone or direct email). 2 To: Catherine, Christine, et al I would appreciate your comments regarding a broker with whom I have been speaking. We have no binding agreement as of this time and I was upfront and asked him what would happen if I found a better lender, rate, or broker. He replied that I should work with him up to getting pre-approved for a loan. "If you haven't liked what I've done for you up till that point," he said "you can simply let me know you've found something better and all you've lost is your fee ($15) for your credit check." Sounds like a fair enough deal to me. Or am I missing something here? I understand the implications of having too many credit inquiries run by the banks to get our scores (up to three shouldn't cause too much trouble, I read at IRED, I believe). Our tri-agency credit report (which I ordered from Carreon & Assoc) is excellent (no debts, no loans, no BKs, no liens, and only one late payment back in 1997). If I'm not happy with this gentleman's services, I figure that I can try at least two other brokers. Finding them is the hard part. I would appreciate your comments, corrections, suggestions. I'm proceeding with as much caution as I can (trying to keep all the BayHouse tips in mind) but at some point, I have to trust someone, no? Look forward to your replies. Thannk you.
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| | Thursday, July 27, 2000 - 09:01 pm I have to agree with Cathrine and Christine and how bad this business has become. Having been a broker in CA, I must agree the the CA DRE is by far one of the worst organization. I always thought that there should be separate regulators for Real Estate Agents and Lenders. I sometimes though that the DRE was just a bunch of washed up Realtors that wanted to make lender suffer. One thing though that CA DRE does do well is post licensing info. I would recomend that Joseph check out their site to see if the broker he is looking to work with has had prior problems. This could be a red flag. http://www.dre.cahwnet.gov/ (actually she looks pretty good as well as the company) One other thought for you Chistine. I finally found the form that I mentioned months ago. I think this is an excellent form for a borrower looking to hire a broker. I think it put's everyone on the same page. http://www.hud.gov/fha/sfh/res/mbcontr2.html However, borrowers must be ready to fully disclose their situation and understand if it is not as stated that things could change.("Oh, did I forget to mention the collection and foclosure?") Do they think we won't notice them? Maybe you could add this form to you database about hiring a broker? Having been in this business for 10 years from the retail/wholesale/management/broker and more, I've seen so much crap that somedays I wonder why I still do it. For me I would much rather negotiate a fair price upfront with a borrower and know that that borrower is commited. Once the price is set then your only interest is finding the best deal for the borrower. Instead our industry is fraught with games played by greedy individuals and borrower swooned by lowlife, lowquoting, bait and switch, non-experience, loan officers. I'm sorry to ramble, but I was looking over a HUD-1 today from another broker who is closing on a loan for the sale of my buyers home. It was oviously a FHA loan for $118,500. The broker charged a 1% origination fee which I have no problem. The interesting part was the broker was also making a $3085.19 YSP fee which I'm sure the borrower has no idea. Now I'm all for capitalism but with full disclosure. But I don't think the buyer readily would have agreed to pay this much had they known. And I doubt the intial GFE reflected the YSP. GREED, GREED, GREED!!!
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