Shopping For A Mortgage? Beat the Banking Cartel By Using The Rules IT Implemented Against It

By
Mortgage and Lending with San Diego VA Home Loans/858-777-9751

Should you pick a (a) bank, (b) non-depository lending correspondent (direct lender), or (c) mortgage broker to secure mortgage financing when you purchase your new home?

The answer is (d) all of the above if you want to shop for a mortgage.

The mortgage lending industry has been, for all practical purposes, nationalized at this point in time.  Massive regulatory efforts like the Dodd-Frank Act were enacted  to "prevent consumers from 'abusive' practices" regarding loan originator compensation,  In practice, this Act actually penalizes the SMART consumers and buttresses the profits of the banking cartel.  One of the most anti-competition regulations just took effect and you, the smart consumer, can get really rooked; I'm going to show you how to beat these guys at their own game.

The Federal Reserve Bank (the Fed) , under the authority given it through the Dodd-Frank Act, specifically outllawed the ability of a consumer to negotiate individually with a loan originator.   The Fed demands that all borrowers be treated equally, by each loan originator (regardless whether he works for a bank. lender, or brokerage), when that originator charges for his or her services.

Sounds fair, doesn't it?  I mean, everyone wants to be treated equally, right?

Except, lending  terms, like life, isn't supposed to be about equality of outcome.  Each borrower is unique, with her own set of strengths and challenges.  Those can present certain risks to lenders (and loan originators).  If you are a well-heeled borrower, meaning you manage your credit well, have ample income to service the mortgage payment, and have saved a healthy down payment, you have been lumped into the same category as the sketchy-paying, pie-in-the-sky dreamer, who wants to buy the biggest house for the least amount down, regardless of his financial status.

Stated differently, we could offer flinty, prudent, educated consumers, a discount, for being well-prepared for the loan process, prior to April 1, 2011.  Today, we have to charge you as much as the haphazard loan applicant.  In a sense, you are being penalized for your hard work and dliigence.

I'll show you how to get around that by employing a process I call the shotgun application.  I'll catch some heat for letting you in on this secret.  This is a real estate industry website, which allows comments from lenders.  They will hate that I'm telling you how to negotiate, by pitting the banks, direct lenders, and mortgage brokers against one another, so that YOU get smokin' mortgage terms. Watch how they act in the comments section below.

The real estate agents may go so far as to suggest that you should use only a lender whom they know , or that you should only use one of the government-subsidized banks ( the ones the taxpayers had to bail out because they couldn't manage risk).  Ask yourself why they give such advice.

This game has been rigged against you, by the Federal Reserve Bank, at the behest of the bailed-out-by-the-taxpayers banking cartel.  The Fed regulation which prohibits you from negotiating with the loan originator was designed to penalize the more nimble loan correspondents and mortgage brokers BUT...

...as with all government regulation, it's filled with loopholes.  I'll show you those loopholes, so that you can play the game by your rules , and win.

I expect this series to be about 4-5 articles so keep checking back.  I'll provide links to each article at the bottom of the page.

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Ambassador
529,195
Rich Jacobson
Keller Williams West Sound Realty - Poulsbo, WA
Your Kitsap County WA Real Estate Broker

So I should recommend mortgage lenders I don't know? Does that mean I have to stop referring clients to you?

Jun 30, 2011 03:44 AM #1
Rainmaker
591,234
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

Brian,

Do you really think the minions will recognize the evil that is the Dodd-Frank Act?

Consumers and agents a like believe all those " 'abusive' practices"  like the vial YSP  makes a loan from a mortgage broker evil when the exact same loan from a bank is better because there is no YSP. The problem is consumer ignorance and voter stupidity!

I personally take issue with the implication that a "a healthy down payment" is some how better. "Equity is optional liquidity is mandatory!" Those lagitment defaulting debtors would have been so much better off if they had put less down and kep cash on hand. Former equity means nothing!

I'm looking forward to your "shotgun applaction" seares, "there is always more than one way!" I wounder who is going to help the consumer implement it!

Good luck.

Bill

Jun 30, 2011 07:42 AM #2
Rainmaker
1,035,095
Gary L. Waters, Broker Owner Waters Realty of Brevard, LLC
Waters Realty of Brevard, LLC - Melbourne, FL
Personal Service, always.

I do not care which lender my buyers use as long as they can deliver a quality product, at a competitive price, without excessive cost, and can close the transaction within the contracted time frame. Unfortunately there are not a lot who fit that description.

Jun 30, 2011 07:58 AM #3
Rainmaker
306,034
Brian Brady
San Diego VA Home Loans/858-777-9751 - San Diego, CA
VA Home Loans/San Diego

So I should recommend mortgage lenders I don't know?

Of course not,.  There is a difference between a recommendation and an insistence, though.

<The real estate agents may go so far as to suggest that you should use only a lender whom they know>

This is the practice I forwn upon, Rich.  "Only" emboldened.

Unfortunately there are not a lot who fit that description.

Agreed, Gary.  I hope to help diffuse that problem with the shotgun application.

Jun 30, 2011 12:37 PM #4
Rainmaker
336,670
Tom Burris
NMLS# 335055 - Dallas, TX
Texas Mortgage Dallas Mortgage FHA

I look forward to the series.

I ain't afraid

 

Jun 30, 2011 03:50 PM #5
Rainmaker
306,034
Brian Brady
San Diego VA Home Loans/858-777-9751 - San Diego, CA
VA Home Loans/San Diego

Of course you're not, Tom

(point of disclosure:  Tom Burris is the LO to whom I refer Texas business.  That relationship was built here, right on Active Rain)

Jun 30, 2011 06:19 PM #6
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Rainmaker
306,034

Brian Brady

VA Home Loans/San Diego
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