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Last Login: 2/12/2010 9:34:04 AM
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| The last time I checked, LOs for brokers had to show origination charges and YSP on the old GFE. Has been that way for quite some time. Now, under the new GFE 2010--my compensation is shown, agreed, but with it goes my lenders funding/underwriting fees, doc prep fees, processing fees--all to inflate the actual compensation to appear that it is going to the originatior. It is a very indirect method to put the broker/LO in a position that when compared to a bank that doesn't show indirect compensation and internalizes some of their lender fees, we--the broker--are at a supreme disadvantaged. What's the answer? Throw it back to the borrower and tell them right up front how the numbers break down, who gets paid what, and what isn't being disclosed by the bank. And then challenge them to talk to the bank to confirm it. More often than not, they will be happy with your explanation and you can move forward just like we did before 1/1/2010. Gary
Gary A Bracht
Broker
Western Mortgage |
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Last Login: 3/5/2010 7:04:43 PM
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| | Well, the birds of 2010 have finally come home to roost. Our brokerage was doing a USDA loan on which we should have earned a total of 3 points (1 origination point, 2 points YSP). In the pre-2010 world, we could do this. Post 2010, however, because the USDA funding fee takes up 2% of fees, the rest of our fees cannot exceed 2%, because doing more than that kicks it into the high-cost loan category. So, on government loans, or a conventional loan with up-front MIP, watch your total fees!
"If it ain't broke, don't fix it. Oops - too late!" |
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Last Login: 2/12/2010 9:34:04 AM
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| HelpMePlease (2/11/2010)
Well, the birds of 2010 have finally come home to roost. Our brokerage was doing a USDA loan on which we should have earned a total of 3 points (1 origination point, 2 points YSP). In the pre-2010 world, we could do this. Post 2010, however, because the USDA funding fee takes up 2% of fees, the rest of our fees cannot exceed 2%, because doing more than that kicks it into the high-cost loan category. So, on government loans, or a conventional loan with up-front MIP, watch your total fees! I would have to dig into this, but my understanding on this a section 32 loan cap is higher than that, unless your lender has their own overlay they are using. I have been bit on this on small loan amounts in the $40K range because they count all the fee into it, and percentage wise, I get beat up with lender funding fees, etc. My understanding though didn't roll the MIP into that calculation but I could be wrong. What was your loan size? My biggest worry on flat fee proposals by the Federal Reserve is they won't modify the Section 32 changes, so we'll potentially be blocked out of lower loan amounts if you do them because invariably you're going to breach the Section 32 hits. Did the lender include your YSP/credit/rebate/whatever you want to call it... in with their calculation? Thanks, Gary
Gary A Bracht
Broker
Western Mortgage |
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