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JoefromPhilly
661 Posts |
 Posted - 07/23/2008 : 09:21:07 AM
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I just read this article that addressed the "abuses" of YSP. It talks about legislation that will ban YSP nationwide, and mentions some states that have already banned YSP or are planning on doing so.
http://money.cnn.com/2008/07/21/real_estate/mo_ban_on_lending_abuse/index.htm?postversion=2008072312
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mganovsky
2070 Posts |
Posted - 07/23/2008 : 10:36:35 AM
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| I get so tired of hearing or reading articles from so called experts that do not have a clue as to how the industry works. don't these so called experts know that there is no such thing as a Sub-Prime loan any more. |
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CoralSnake
10880 Posts |
Posted - 07/23/2008 : 10:52:52 AM
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| Of course it neglects to mention that without YSP, borrowers would need to come up with more money to close. |
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Carpet Muncher
1385 Posts |
Posted - 07/23/2008 : 10:53:56 AM
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| No mention of SRP for correspondent |
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lunarhamster
4032 Posts |
Posted - 07/23/2008 : 10:58:28 AM
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quote:
Originally posted by CoralSnake
Of course it neglects to mention that without YSP, borrowers would need to come up with more money to close.
Exactly, the idiots think they are helping the borrower, but in reality they are hurting them. They have no idea how our business works.
Car salesman make YSP, many business pay yield, are they going to shut them all down? |
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dtabar
768 Posts |
Posted - 07/23/2008 : 10:59:22 AM
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| slander? |
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VVance
2489 Posts |
Posted - 07/23/2008 : 11:02:05 AM
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quote:
Originally posted by JoefromPhilly
I just read this article that addressed the "abuses" of YSP. It talks about legislation that will ban YSP nationwide, and mentions some states that have already banned YSP or are planning on doing so.
http://money.cnn.com/2008/07/21/real_estate/mo_ban_on_lending_abuse/index.htm?postversion=2008072312
I thought this was put to bed for the time being. |
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n0denine
113 Posts |
Posted - 07/30/2008 : 7:38:24 PM
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Omg, This will almost deystroy the broker industry all together IMO...
"Its all those greedy brokers raising the intrest rate to get a bigger pay day and put the borrower in financial danger!!!" What a true moron, whats next? best buy and their wholesaler? "Those greedy guys at best buy mark the price of this plasma TV up $1100!!! and sells it for $6000! when the wholesaler sells it to best buy for only $4900!!! Those greedy guys, they are to blame!"
Not to mention what lunarhamster said about hurting the borrower when they find out that they will have to get a larger up front cost if they did away with YSP. |
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joes6370
115 Posts |
Posted - 07/30/2008 : 7:58:58 PM
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| So I guess we'll just have to put all of it in the O-fee. I've worked for banks, correspondent lenders and brokers. It never matters to me whether or not YSP has to be disclosed. My borrowers always have and always will know exactly how much I am getting on a deal. Take YSP away. I have been wishing that would happen for years. I make the same because I'm honest. Higher up front = lower rate so no one is getting railroaded here. It's just more straightforward. Comments about borrowers not understanding our business won't apply because there will no longer be a need. "I'm charging you 5,000 up front and you're getting 5.875% fixed for 30 years. Any questions?" Simple. For everyone. I love it. |
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U812
390 Posts |
Posted - 07/30/2008 : 8:48:38 PM
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quote:
Originally posted by joes6370
So I guess we'll just have to put all of it in the O-fee. I've worked for banks, correspondent lenders and brokers. It never matters to me whether or not YSP has to be disclosed. My borrowers always have and always will know exactly how much I am getting on a deal. Take YSP away. I have been wishing that would happen for years. I make the same because I'm honest. Higher up front = lower rate so no one is getting railroaded here. It's just more straightforward. Comments about borrowers not understanding our business won't apply because there will no longer be a need. "I'm charging you 5,000 up front and you're getting 5.875% fixed for 30 years. Any questions?" Simple. For everyone. I love it.
What about the client that doesn't have the $5,000 up front? |
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mgraham224
1008 Posts |
Posted - 07/30/2008 : 9:14:19 PM
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| If YSP goes away, seller paids will go up to compensate for those that don't have the cash and it will likely take on a form similar to UFMIP where it can be financed on top of appraised value. Bottom line here is we'll all have to swim in the same pond and the good honest brokers will keep making money. |
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joes6370
115 Posts |
Posted - 07/30/2008 : 10:24:10 PM
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quote:
Originally posted by mgraham224
If YSP goes away, seller paids will go up to compensate for those that don't have the cash and it will likely take on a form similar to UFMIP where it can be financed on top of appraised value. Bottom line here is we'll all have to swim in the same pond and the good honest brokers will keep making money.
Exactly.
U812 are you reading this? You create it. On a purchase, the seller pays it or the buyer finds it. On a refi, you build it into the new loan. Do you really need me to answer this for you? I think not. You didn't start doing loans last month, at least I hope not, and if you did that's ok. Learn from this. Banks don't do loans for free. We are all in business to make money or we'd be fishing every day instead of working. I know, I worked for one of the top 4 banks in the world. I know for a fact that the wholesale and retail reps made yield and no, Rita, I will not paste the internal Wachovia retail and wholesale rate schedules to prove it so don't ask. Just know that I have them.
Banks will have to change their model just like brokers will. It will change, that's all and we will adapt as always. Nothing is going to kill brokers. Why doesn't anyone understand that? There will always be a need for a knowledgeable middle man to negotiate a loan between a bank and a borrower. ALWAYS.
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dtabar
768 Posts |
Posted - 07/30/2008 : 10:27:38 PM
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| I guess this would make locking a no brainer.. |
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cmll777
48 Posts |
Posted - 07/30/2008 : 11:27:02 PM
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Eliminating YSP will not kill the wholesale business, but it certainly will be a very bad move for the consumer, if they are working with a reputable broker.
Having a YSP gives people options, and more choice is a good thing. Sure, some borrowers want to pay a point to get lower pricing, but most do not. They would rather take a slightly higher rate and have less cost. Usually, the difference in monthly payment is minimal, and the break even time for paying a point vs. paying no point is often around five years. In a healthy mortgage environment, a lot of those borrowers will never see the advantage of paying the extra costs, since they are likely to refinance or move.
Since I started in the business, I have given my borrowers the option of paying no point vs. paying a point, and when rates were dropping I would offer them a no cost option as well. I would say 75% of my borrowers or more chose the option with less cost.
When rates were dropping, I used to do a lot of no cost loans. I would take a YSP high enough to pay all closing costs for my borrowers, and make a little money for me. Then, when rates would drop, we would just refinance again, no cost. Had those people paid closing costs each time they refinanced, they would have lost money by taking a lower rate. By paying no costs, they could refinance everytime rates dropped .5%. In a dropping rate environment, this is a great situation for both the borrower and the loan officer.
One of the great things about being a wholesale loan broker is that we can be paid directly from the lender. Unlike other brokers, this means we do not have to charge a fee for our services, unless the borrower wants a lower rate. YSP is not a ransom, it is a tool that helps us give the best possible options to our borrowers.
Chris
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joes6370
115 Posts |
Posted - 07/30/2008 : 11:48:23 PM
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quote:
Originally posted by cmll777
Eliminating YSP will not kill the wholesale business, but it certainly will be a very bad move for the consumer, if they are working with a reputable broker.
Having a YSP gives people options, and more choice is a good thing. Sure, some borrowers want to pay a point to get lower pricing, but most do not. They would rather take a slightly higher rate and have less cost. Usually, the difference in monthly payment is minimal, and the break even time for paying a point vs. paying no point is often around five years. In a healthy mortgage environment, a lot of those borrowers will never see the advantage of paying the extra costs, since they are likely to refinance or move.
Since I started in the business, I have given my borrowers the option of paying no point vs. paying a point, and when rates were dropping I would offer them a no cost option as well. I would say 75% of my borrowers or more chose the option with less cost.
When rates were dropping, I used to do a lot of no cost loans. I would take a YSP high enough to pay all closing costs for my borrowers, and make a little money for me. Then, when rates would drop, we would just refinance again, no cost. Had those people paid closing costs each time they refinanced, they would have lost money by taking a lower rate. By paying no costs, they could refinance everytime rates dropped .5%. In a dropping rate environment, this is a great situation for both the borrower and the loan officer.
One of the great things about being a wholesale loan broker is that we can be paid directly from the lender. Unlike other brokers, this means we do not have to charge a fee for our services, unless the borrower wants a lower rate. YSP is not a ransom, it is a tool that helps us give the best possible options to our borrowers.
Chris
Valid points. Read my post in another thread about how borrowers want their cake and eat it too, but they poison it by regulating us until our farts have to be examined for content. They won't be happy until they can't get loans anymore. and then they'll say we're responsible for that, too. |
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U812
390 Posts |
Posted - 07/31/2008 : 06:21:01 AM
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quote:
Originally posted by joes6370
quote:
Originally posted by mgraham224
If YSP goes away, seller paids will go up to compensate for those that don't have the cash and it will likely take on a form similar to UFMIP where it can be financed on top of appraised value. Bottom line here is we'll all have to swim in the same pond and the good honest brokers will keep making money.
Exactly.
U812 are you reading this? You create it. On a purchase, the seller pays it or the buyer finds it. On a refi, you build it into the new loan. Do you really need me to answer this for you? I think not. You didn't start doing loans last month, at least I hope not, and if you did that's ok. Learn from this. Banks don't do loans for free. We are all in business to make money or we'd be fishing every day instead of working. I know, I worked for one of the top 4 banks in the world. I know for a fact that the wholesale and retail reps made yield and no, Rita, I will not paste the internal Wachovia retail and wholesale rate schedules to prove it so don't ask. Just know that I have them.
Banks will have to change their model just like brokers will. It will change, that's all and we will adapt as always. Nothing is going to kill brokers. Why doesn't anyone understand that? There will always be a need for a knowledgeable middle man to negotiate a loan between a bank and a borrower. ALWAYS.
cmll777 hit the nail on the head with his post.
However, in response to your answer,"You create it. On a purchase, the seller pays it or the buyer finds it.".
You're assuming that a seller will pay it and the finding it part isn't really an answer to the question I posed. Also, regarding the Refi answer you gave, you're assuming they have they equity to tap into. When in reality in this market, it very well may not be so.
YSP has a place in mortgage financing, to think otherwise is narrow minded. |
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george-1st
148 Posts |
Posted - 07/31/2008 : 10:52:16 AM
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Nothing is going to kill brokers. Why doesn't anyone understand that? There will always be a need for a knowledgeable middle man to negotiate a loan between a bank and a borrower. ALWAYS.
[/quote]
Ditto!
George
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joes6370
115 Posts |
Posted - 07/31/2008 : 12:33:07 PM
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quote:
Originally posted by U812
quote:
Originally posted by joes6370
quote:
Originally posted by mgraham224
If YSP goes away, seller paids will go up to compensate for those that don't have the cash and it will likely take on a form similar to UFMIP where it can be financed on top of appraised value. Bottom line here is we'll all have to swim in the same pond and the good honest brokers will keep making money.
Exactly.
U812 are you reading this? You create it. On a purchase, the seller pays it or the buyer finds it. On a refi, you build it into the new loan. Do you really need me to answer this for you? I think not. You didn't start doing loans last month, at least I hope not, and if you did that's ok. Learn from this. Banks don't do loans for free. We are all in business to make money or we'd be fishing every day instead of working. I know, I worked for one of the top 4 banks in the world. I know for a fact that the wholesale and retail reps made yield and no, Rita, I will not paste the internal Wachovia retail and wholesale rate schedules to prove it so don't ask. Just know that I have them.
Banks will have to change their model just like brokers will. It will change, that's all and we will adapt as always. Nothing is going to kill brokers. Why doesn't anyone understand that? There will always be a need for a knowledgeable middle man to negotiate a loan between a bank and a borrower. ALWAYS.
cmll777 hit the nail on the head with his post.
However, in response to your answer,"You create it. On a purchase, the seller pays it or the buyer finds it.".
You're assuming that a seller will pay it and the finding it part isn't really an answer to the question I posed. Also, regarding the Refi answer you gave, you're assuming they have they equity to tap into. When in reality in this market, it very well may not be so.
YSP has a place in mortgage financing, to think otherwise is narrow minded.
You're right, but if it is to be taken away as a tool then we have to speculate on what will happen in the markets and in our profession. That's what I was doing. I wasn't commenting on a world with YSP as we know it now. If it does get taken away, we would have to create our paycheck somewhere else if the borrower couldn't swing it up front.
I agree with everything you said. YSP is a great tool but public opinion = the government and now we're likely to lose it. Not just us, borrowers too. That's why I often comment on how the tighter the regulations get the less flexibility loan originators have to work with. That hurts all parties involved in a transaction. Congress is going to make it impossible to qualify for a loan at all by putting up conflicting rules that cross each other so often theres no possible way NOT to violate one or more of them if they keep traveling down the road they're on. The bank and broker inquisition needs to stop. It's sad really. Most of us, I think, are honest. |
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cspatmon
2142 Posts |
Posted - 07/31/2008 : 12:42:21 PM
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| In contrast, if YSP was no longer a consideration would you stay in the business. I know I would because, I make my money on volume. For those that will leave the business on such notion....I would become more sought after.....sounds like a plan! |
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Scrooge McDuck
8837 Posts |
Posted - 07/31/2008 : 12:47:26 PM
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| points on the front. points ont he back. who cares where you get them. do the right thing for the borrower, and all will be well. |
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