Several Mortgage Lender Associations nationwide have announced a 6 month moratorium on the incessant whining regarding the new Good Faith Estimate. Attention will be immediately shifted to proposed rules by the Federal Reserve Board which may eliminate compensation based on placing a consumer into a higher rate loan or a less favorable loan product.
“Flat fee compensation is bad for consumers because only an idiot would originate a loan without the ability to potentially make thousands more by selling the consumer a higher rate loan than they think they could get” said Billie Joe, a loan originator from Tukwila. “This will mean reduced competition for consumers as all the good salespeople will go back to working at the used car lots.” Tre, who goes by his LO gang name, “Tre Cool,” agrees. “At the top of the bubble, I could make a 1 percent loan origination fee, another 1 percent mortgage broker fee, if the customer were stupid enough not to know what a discount point was, I could make another couple of points in discount, toss in $500 for an admin fee, another $500 processing fee and then make upwards of 4 to 5 points on the back end, as long as I sold a Pay Option ARM loan and as long as the dupe THOUGHT they were getting a lower monthly payment, nobody questioned my fee income! That party’s no longer real, man. Today I’m lucky if I can make 1 point.” Originator Mike D has a different perspective. “Dude, like when you think about it, I only spend about 4 hours on a file. My average loan amount is $400,000 so even though I’m makin’ $4,000 on that one transaction, I’m, like still earning $1,000 per hour. That impresses the ladies and pays all my bills so I’m not gonna rock the boat on this new proposed rule. Get back with me when that sh*t becomes real, man.”
Until then, the industry is still working very hard at containing the radical mortgage militia cells who continue to work day and night on repealing the unpleasant Home Valuation Code of Conduct( HVCC,) pledging to change this rule “or die trying.” According to one source, who asked to remain anonymous,
“Mortgage lenders have an enormous capacity for joining together and making our voices heard collectively. When we brought boxes of signed petitions to the New York Attorney General’s office to force an immediate ban on the grave hardship HVCC has caused our industry, and uh, consumers, not one change was made. But if and when anyone actually does listen to our collective voices we’ll all be the first to celebrate a victory that will once again include our ability to influence appraisers and we are already planning the celebration in which we’ll all get extremely drunk and eat free appetizers. A title insurance company has already stepped forward to pay for the food and refreshments. Not one dime of this celebration will be paid for out of taxpayer dollars.”