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bobbywelch
12 Posts |
 Posted - 08/22/2008 : 4:48:53 PM
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This makes me insane. False advertising in mortgage rate quotes. It has driven me crazy for years when I'd see the daily newspaper mortgage listings with the obvious bait and switch rates but now with the internet this practice hurts even more.
www.mortgagemarvel.com is a newer site that lets consumers enter loan info and get "instant quotes". Many of these quotes are garbage. Pentagon Federal Credit Union for example is listed on these guys as offering 6.125% on a 30 yr fixed, 90 day lock with no origination/discount. That rate is 1.25 points cost at the most aggressive wholesaler. One of my brokers lost a loan to them and pointed it out...
I've contacted mortgagemarvel.com and complained. I printed out the quote and a wholesale rate sheet and reported it as false advertising to the states I'm licensed in too and listed both mortgagemarvel.com and the lender in the complaint.
I urge everyone to do the same. If they get hit with enough about this maybe they'll be more careful. Please take the time to run some quotes in your own area and report any fishy offers you might find: MortgageMarvel@mortgagebot.com. If you can take the time to send the state the same info.
What other rate comparison sites are out there? I'd like to create a coalition that tracks and hits these sites when something is blatantly false.
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mganovsky
2049 Posts |
Posted - 08/22/2008 : 4:53:17 PM
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| I feel for ya, but before I would go complaining I would wait and ask the buyer to give me a copy of the HUD1 at closing, Credit Unions play by there own rules, and it would not be out in left field for them to be able to give that rate and not charge any points. |
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bobbywelch
12 Posts |
Posted - 08/22/2008 : 4:58:24 PM
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| They can't deliver 1.5 points below wholesale. Average wholesaler has 50-60 bps built into the sheet so even someone selling AOT, direct can't be that far out. They also still have expenses to cover in salaries and other costs to do the loan. There are 10 dimes in a dollar and no magic to secondary... if they were 25 - 50 bps better I'd be less skeptical but this is a bogus quote. |
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mganovsky
2049 Posts |
Posted - 08/22/2008 : 5:22:03 PM
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| You could be right but I have seen some really crazy things come out of credit unions in the past. |
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FLProcessor
429 Posts |
Posted - 08/22/2008 : 6:42:02 PM
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Bobby,
What was PFG's rate the same day. Pentagon operates at a margin only about 25 bp over PFG, in my experience, without overlays.
I am not downplaying your concerns, because I feel your pain 110%. The BS rates drive me crazy. With that said, Pentagon is the one company I would not want to go up against (to prove my point) -- they operate on an unbelievably low margin. Chances may even be a simple delay in updating rates, etc. |
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fanofjam
69 Posts |
Posted - 08/22/2008 : 7:53:50 PM
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| I lost a jumbo 30 year fixed to Pentagon Fed in March. At the time the par rate for me was near 7. They came in at 5.5% and adverstised in on their website. Loan amount was $670K. I don't know if they portfolio their products or what, but my guy would have gone with me if I had even been in the same zip code as their rate... |
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Mandyvilla
3405 Posts |
Posted - 08/22/2008 : 10:26:32 PM
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| MY BROTHER DUMPED MY B OF A QUOTE FOR PFCU! Plus, they got a 1% rebate if they used their real estate agent for the purchase.....585K, bye sis. (I cut my price hard, too) |
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FLProcessor
429 Posts |
Posted - 08/22/2008 : 10:47:40 PM
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Mandy is dead on -- and you know as an inside LO at BofA, she wasn't hitting her brother up for the big bucks. BofA is pretty damn good all on their own.
And fanofjam -- you're right on the money, you cannot compete with their jumbo pricing. There is no wholesale option competitive with their offerings.
Therefore, to reiterate my earlier post.. I completely feel your pain and I'd like to help you, but it's got to be going against someone other than PFCU, because they're pretty tough to beat (as difficult as it is to believe).
SIDENOTE: To comment on your point about the secondary market not having some magical aspect where you can beat pricing by over 60bp, you're absolutely correct; however, that does not apply on overlay pricing such as jumbos -- just to be sure we're on the same page. |
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Quicksilver
4605 Posts |
Posted - 08/23/2008 : 09:27:38 AM
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| dp |
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Quicksilver
4605 Posts |
Posted - 08/23/2008 : 09:28:50 AM
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| Funny this came up, have a few friends who mentioned this company Pentagon and it is legit as they would ask to see the HUD1. Wholesale wasn't even close to competing on their terms even on jumbo's. I've see credit unions do crazy/strong stuff, but from what I'm seeing Pentagon do its on another level. I know on one of the jumbo's my buddy cut his fee seriously down and bought down the rate and came close to the terms of Pentagon, and borrower went back to them Pentagon went even lower without charging discount etc, my buddy would have still had his origination and discount points the borrower would still have to pay, while they were still at a better rate and no orig/discount. They must operate on seriously thin margins. |
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oldmlb
138 Posts |
Posted - 08/23/2008 : 11:15:30 AM
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Did anyone see this?
Date: Mon, 11 Aug 2008 23:06:18 -0700
>
> Credit Unions Facing Up to Mortgage Crunch?
> By: PAUL JACKSON
> August 11, 2008
>
> * The New Subprime? Credit Unions and Community Banks Look to Fill Lending Void
> * Vive Les Subprime Credit Crunch: BNP Paribas Freezes Funds
> * Credit Suisse: Our Traders Don’t Crunch Numbers Very Well
>
> The derailing of the mortgage industry’s secondary markets is hitting everywhere — including some of the nation’s largest credit unions, according to a published report Monday morning, which said that reported losses at the nation’s five largest credit unions now total some $5.7 billion. That total may be even higher than reported, as well, given allegations that the credit unions facing the largest losses are playing a shell game with their accounting efforts.
>
> The Wall Street Journal reported that, like anyone else that’s invested into RMBS these days, five of the nation’s largest so-called corporate credit unions — U.S. Central Federal Credit Union; Western Corporate Federal Credit Union; Members United Corporate Federal Credit Union; Southwest Corporate Federal Credit Union; and Constitution Corporate Federal Credit Union — are taking losses on investment grade subprime and Alt-A RMBS, as the value of securities in both sectors plummets.
>
> Corporate credit unions aren’t consumer facing, but provide investment services and financing to more regular credit unions nationwide.
>
> The $5.7 billion in losses on paper are enough to wipe out the net worth of each of the five credit unions, the Journal said; aggregate negative equity after accounting for so-called “unrealized” losses on the RMBS securities is $2.9 billion, although that total doesn’t account for membership capital, or the float of funds tied to regular credit unions.
>
> A shell game?
> The most explosive allegations in the Journal’s story, however, are that the two credit unions absorbing the biggest RMBS hits — U.S. Central FCU and Western Corporate FCU — are using accounting tricks to potentially hide further losses. The games being played here aren’t all that different from what’s being observed in other sectors, but take on new significance because credit unions don’t have ready access to new capital, a la Merrill Lynch & Co. (MER: 26.49 -1.41%) and others.
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> Both credit unions earlier this year reclassified a huge chunk of their assets as “held for investment,” moving them out of the more traditional “available for sale” accounting category; it’s a shift that the federal regulator overseeing credit unions said had never been done in the industry’s past. It’s also a shift that means any valuation changes that are deemed temporary in nature don’t have to be recorded against income.
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> By June, U.S. Central had placed $10.9 billion of its $35.3 billion in investments into the “held for investment” category, according to the Journal, while Western Corporate has moved one-third of its total investments — $9.6 billion — into the same category. Both moves came as the secondary markets locked up and the companies say they decided it would be better to hold the assets until maturity (or they realized they’d never be able to sell an illiquid asset, take your pick).
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> But how much of the current depressed valuations of subprime and Alt-A — even the AAA-grade stuff — can honestly be considered “temporary?” At what point is an other-than-temporary permanent impairment charge warranted?
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> In our view, the two credit unions in question might be the last holdouts on Earth at this point still adamantly saying their securities will recover in value at some point, or that they’ll be able to hold them to maturity. More than a few commercial and investment banks strutted the same point out roughly two quarters ago, and have since abandoned the line of thought as the mess has come into clearer view.
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> The Journal story cites the example of Southwest Corporate, a credit union that holds $2.5 billion in subprime, Alt-A and home-equity RMBS — but hasn’t moved assets into “held for investment.” Southwest Corporate recorded $672 million in unrealized losses on its RMBS investments through May; were just $100 million of that total deemed permanent, the credit union would have fallen below its regulatory minimum capital threshold.
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> Despite mounting concerns, Kent Buckham, director of the National Credit Union Administration, called the possibility that a corporate credit union might fail “remote.” The last such failure was in 1995, according to the Journal story.
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TheFinancier
650 Posts |
Posted - 08/29/2008 : 11:31:31 AM
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Many people here will defend false ads as a "a way of doing business". It sickens me.
Pentagon is the real deal they can give what the offer but no broker programs. |
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FLProcessor
429 Posts |
Posted - 08/29/2008 : 11:44:18 AM
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| Speaking of Pentagon, they are offering a special right now for conforming/jumbo deals both... 6.00% without points. Yes, you heard that right, for both. This is not a bait-and-switch. Tough to compete with that! |
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Scrooge McDuck
8753 Posts |
Posted - 08/29/2008 : 11:51:39 AM
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there is a credit union up near me thats offering 4.875 on a 7/1 with an apr of 5.125 on jumbos up to 80% ltv.
credit unions are doing their own thing these days. does this emery palce offer anything like that? |
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FLProcessor
429 Posts |
Posted - 08/29/2008 : 12:00:28 PM
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Not when I looked into it... In fact, to me it seemed it was just a front for WThrift. After all Emery was a FCU for many years, and the branch only started / is operated entirely through the Corona conduit...
Patrick said otherwise and obviously I trust him; however, he never responded to my post asking for more details as to why he feels that way... |
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