Mortgage Brokers offer better pricing and can offer reduce rates when the market adjusts in your favor at no cost.

So the CFPB now effectively regulate all things financial, including mortgage lending. And I can guarantee you the biggest firms with the biggest wallets will have the greatest influence on the rules and and regulations "promulgated" going forward.

tr.v. prom·ul·gat·ed, prom·ul·gat·ing, prom·ul·gates

1. To make known (a decree, for example) by public declaration; announce officially. See Synonyms at announce.

2. To put (a law) into effect by formal public announcement.

It just is how it is...But you as a consumer, Realtor, mortgage originator can share a big difference that really ends up being a very real and valid reason to use a mortgage broker instead of a mortgage lender, or bank.

It's called up-selling or steering - also knowing as bait and switch in some cases. The cold hard truth is we have all been told the mortgage broker primarily caused the financial collapse of 2008 (which really started in 2007) but it isn't true. Sure the broker did plenty of things wrong and many broke the law and did loans in a way only a graphic artist could admire, but they didn't create the guidelines (lenders, investment bankers, secondary departments) and they certainly didn't pay exorbitant fees to obtain those loans (investment banks, pension funds, fannie and freddie).

But a lender doesn't share beneficial swings in the market to consumers like a broker can. Example, you lock your rate with Bank of America, and three days later the market rallies, everyone buys treasuries and demand for mortgages (by institutions) increases thereby decreasing the cost and interest rates being offered. Bank of America will pocket the difference and not allow you to relock at the new market rate, with-out a hit. Whereas, a broker can simply re-trade that loan with another investor at a lower price, and share the savings with you the borrower.

Even worse, assume you don't even know the market had improved and you just take the rate you locked. If the bank sells that loan for even more, they don't share it with you. The banks and direct lenders can offer the better pricing but don't most of the time.

Even the rules allow for variable commissions and "generally prohibit the acts that should ALWAYS be prohibited. Read the CFPB rule below - in summary:

             "To prevent incentives to “up-charge” consumers on their loans, the final rule generally
prohibits loan originator compensation based upon the profitability of a transaction or a
pool of transactions. However, the final rule clarifies the application of this prohibition
to various kinds of retirement and profit-sharing plans. For example, mortgage-related
business profits can be used to make contributions to certain tax-advantaged retirement
plans, such as a 401(k) plan, and to make bonuses and contributions to other plans that
do not exceed ten percent of the individual loan originator’s total compensation."


So next time you think about choosing a broker versus a banker or bank, or direct lender. Make sure you understand a broker works for you to aid you in finding the best deal from multiple investors. The direct lender is only going to offer you their best pricing that day. AND they can mark up there prices without you even noticing since disclosure laws are easier for direct lenders.

Realtor's CAN do loans; Subprime is back; Real Estate is hot. Those are some good headlines.

Full credit to Rob Chrisman   So it is an age old question, much like, What is meaning of life? What is Stonehenge? Do bears %^** in the woods?  Can a Realtor originate loans. It would appear in this article that the answer is YES!! If.... Point of fact, I am a mortgage broker and not an approved FHA lender. So if you are thinking about originating loans, AND you are a Realtor Broker - I want to talk with you!! 

Sometimes I am asked, "Can I work for a lender as a loan officer and as a realtor for another company at the same time?" or, "Can a loan officer of a sponsored third party originator also be a real estate agent?" Fortunately there are some talented folks, and government agencies, that know the answers to these. Barbara Werth (Mortgage Training Today - barb@mttoday@co) wrote to HUD and writes, "I went to the reference listed in the second section, 4060.1 Chapter 2, page 6. I don't think you can do both (as a sponsored TPO - not an Eagle lender - or 'broker', carrying a real estate license and mortgage originator license even if a state supposedly allows it)."

HUD wrote to Ms. Werth, "FAQ: Can I work for a lender as a loan officer and as a realtor for another company at the same time? No, FHA does not permit "dual employment" on a full or part time basis in any mortgage lending, real estate, or related field. The restriction applies to all employees who are employed by a FHA approved lender that work on FHA loans. This also applies to a lender's "wholesale account representatives" that originate loans through sponsored third party originators (brokers). This includes working as a real estate agent or broker for another company. A loan officer may hold a vocational or professional license in real estate but may not engage in realtor activities or make use of the license while employed by a FHA approved lender."

HUD also wrote, "The following information is regarding if a mortgage broker can work as a real estate agent. FAQ: Can a loan officer of a sponsored third party originator also be a real estate agent? Yes, if the sponsored third party originator is not a FHA approved lender or an employee of a FHA approved lender. However, the loan originators of non-FHA approved entities must comply with applicable federal, state, and local requirements governing their FHA loan activities. If the sponsored third party originator is a FHA approved lender, it is subject to the staffing and employment requirements in Handbook 4060.1, Chapter 2. FHA does not prohibit loan originators of FHA approved lenders from maintaining a real estate broker or sales agent license, as long as the FHA approved lender has controls in place to ensure the individual does not make use of their license."

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In other news, Subprime is back. No not necessarily stated income, but yes Subprime loans for credit impaired clients are back in full force. Rates start at 7.95% for 7 year fixed 30 year fixed

AND BANK STATEMENTS can be used for income (Personal or Business). Down payments are big as you would expect, but leverage up to 75% LTV is available. 

I have multiple sources for owner occupied properties and non-owner occupied properties. 

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In other not so shocking news, Real Estate is hot. Phoenix alone had 23% price appreciation YOY. 

California is following right behind that double digit YOY appreciation. So kids go buy some homes. If you income is good and stable, this is a great time to move up to that dream home. 

Financing is hard to find? Really? And FHA is STILL a great product.

Sometimes the press gets it right, and other times, you wonder where the heck they "heard that". When I watch www.CNBC.com lately, and I admit to being a news junkie, I've noticed they talk about financing being tough to get for homeowners and home buyers. So let's take a look at that theory.

First let's look at homeowners. So we have the HARP program, which allows borrowers who got a loan out prior to June 2009 AND whose loan is owned (this does not mean serviced - or who collects your payments) by Fannie Mae or Freddie Mac, to refinance with little to NO worry about the value versus the loan amount, or LTV (Loan to Value). They allow credit scores and you can even have a late mortgage payment over 30 days in the last year.

There is also the FHA Streamline program with allows current existing FHA borrowers to refinance at today's low rates in many cases with NO INCOME DOCUMENTATION and NO APPRAISAL requirement. Wow, that sounds like the old days.

And how about the home buyer? Surely, we lenders make it VERY hard for them to get a loan. Well you can put down next to nothing and buy a house today - even if your credit score if below 620. The FHA still offers home buyers options to buy with as little as 1% down. If you buy a HUD owned home as little as $100 down.

If you buy a home and you're a veteran...then you can get 100% financing.

If you buy a home in a rural area, USDA offers 100% financing on purchases as well.

And even if you just want a plain ole vanilla mortgage and have good to great credit, Fannie and Freddie will still offer purchase loans with as little as 3% down.

With all these options, its still amazing to me that some of my favorite news shows continue to talk about the lack of financing....I am here COME GET MONEY FROM ME!! I want to lend.