The Beauty of a Small Shop

After putting Gracie and Emma down to bed, I often sit and wonder about the state of today's mortgage market. With over 180 lending institutions crumbling over the 12 months, the government thinks it can step in and save the day. We know this is never good nor would we ever ask for their help. The mortgage market or the actual writing of a mortgage is and can be very complicated. I got my start back in 1991 from a small bank, where I learned how to underwrite a mortgage the old fashion way.

Imagine using a calculator to figure out pre-paid interest or even explaining to a client how an adjustable rate mortgage will actually adjust. Without all the fancy tools, I can show you how to increase your credit scores within just a few months.

I have been getting many calls from Lenders, Brokers and Bankers over the last few weeks asking if we are going to be okay. This is the beauty of being in a small shop; we have to be accountable for everything. We know how to integrate our government forms into our loan officer software so that we can be compliant. Did you know that a Federally Chartered bank does not have to comply with State and Local guidelines? Did you know that a mortgage broker can not “pad” their fees? If the credit report costs us $23.49, that is all we are allowed to charge. Look closely at your last closing documents- that Bank charged you a flat fee of $50.00 for that report. Imagine that each little item is marked up to $50… that comes to a little over $500 just in junk fees. Never mind the rate they are charging!

These new loan officers today; they are selling a product, and if this doesn’t work out, they’ll go back to whatever else they were selling before. It is a shame that no one has morals or any kind of ethics to adhere to.

The worst thing about the mortgage meltdown is the Government. We actually have people and politicians writing these bills and new legislation that do not know the first thing about the mortgage industry.

If we get rid of Yield Spread Premiums, (YSP) it will not only close down the mortgage broker, but it will close down many of the small banks that don’t lend there own money anymore. It will close down the correspondent lender as well as many of the wholesale lenders. Don’t forget about the real estate attorneys and real estate brokers that have made a nice living from the mortgage brokers as well. Oh yeah, you might as well shut down the real estate appraisers too.

Just my random thoughts from the night!