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ELI420
148 Posts |
 Posted - 02/18/2010 : 6:17:24 PM
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with the new GFE, rates and pricing don't matter anymore...
whatever we put on the top line, Total ORigination is what we make no matter what the lenders are paying.
so if I put 6000 in my total origination, and say there is a credit of 2300 of (YSP) lender credit... then the Adjusted Origination is $3700 |
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ELI420
148 Posts |
Posted - 02/18/2010 : 6:22:58 PM
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sorry, what I was saying is...
if the another lender only pays 1800 then I still make 6000, and the Adjusted Origination goes to $4200!???
so why do I care what the lenders rates are?? i should just look for a lender with $0 Underwriting fee, so I can keep the full $6000 rather shopping for a rate with the most "LENDER CREDIT or YSP" .... it is just a credit towards the borrowers closing costs... $500 or $1000 different in "LENDER CREDIT OR YSP" doesn't really impact the loan at all. Just make it so the loan amount includes any changes or give the par rate.
i am just giving my customers the rate closest to par, and sending it to lenders with low underwriting fees and great service.
Am I missing something?? or is it that simple? |
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davidfr
2673 Posts |
Posted - 02/18/2010 : 7:04:34 PM
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quote:
Originally posted by ELI420
sorry, what I was saying is...
if the another lender only pays 1800 then I still make 6000, and the Adjusted Origination goes to $4200!???
so why do I care what the lenders rates are?? i should just look for a lender with $0 Underwriting fee, so I can keep the full $6000 rather shopping for a rate with the most "LENDER CREDIT or YSP" .... it is just a credit towards the borrowers closing costs... $500 or $1000 different in "LENDER CREDIT OR YSP" doesn't really impact the loan at all. Just make it so the loan amount includes any changes or give the par rate.
i am just giving my customers the rate closest to par, and sending it to lenders with low underwriting fees and great service.
Am I missing something?? or is it that simple?
You are missing most everything. |
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peeper
219 Posts |
Posted - 02/18/2010 : 7:19:28 PM
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| New GFE requires that you commit to your maximum compensation when the GFE is issued. Since YSP is used to contribute or offset origination fees then it should matter about what the rate is. |
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AndrewSoss
1276 Posts |
Posted - 02/19/2010 : 05:31:13 AM
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quote:
Originally posted by ELI420
sorry, what I was saying is...
if the another lender only pays 1800 then I still make 6000, and the Adjusted Origination goes to $4200!???
so why do I care what the lenders rates are?? i should just look for a lender with $0 Underwriting fee, so I can keep the full $6000 rather shopping for a rate with the most "LENDER CREDIT or YSP" .... it is just a credit towards the borrowers closing costs... $500 or $1000 different in "LENDER CREDIT OR YSP" doesn't really impact the loan at all. Just make it so the loan amount includes any changes or give the par rate.
i am just giving my customers the rate closest to par, and sending it to lenders with low underwriting fees and great service.
Am I missing something?? or is it that simple?
Do yourself a favor and start framing your business around looking at it from your client's perspective. They certainly care how much the ysp credit is for a given rate. If all you are looking at is your take home origination, then you are not going to be competitive with other originators. |
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tractor65
79 Posts |
Posted - 02/19/2010 : 05:53:02 AM
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| Have not thought of it that way ELI420. That actually makes sense why chasing an extra .25 or .375 "in ysp" When I should just focus on getting the loan done smoothly for my client. And look at Lenders with low underwriting fees to make more money myself. YSP does not seem to matter anymore. |
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AndrewSoss
1276 Posts |
Posted - 02/19/2010 : 10:41:27 AM
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quote:
Originally posted by tractor65
Have not thought of it that way ELI420. That actually makes sense why chasing an extra .25 or .375 "in ysp" When I should just focus on getting the loan done smoothly for my client. And look at Lenders with low underwriting fees to make more money myself. YSP does not seem to matter anymore.
You could have always done this....how do the new laws change this at all? For this to be true, you are basically saying that the client only looks at rate, and not fees.
Well, guess what...if your client is shopping you, and I'm able to offer the same rate with .375% credit..guess where he's going?
If he's not shopping you, then it doesn't matter anyway.
I can't tell if you guys are overthinking or underthinking it... |
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FundStar14
1107 Posts |
Posted - 02/19/2010 : 1:24:44 PM
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quote:
Originally posted by AndrewSoss
quote:
Originally posted by ELI420
sorry, what I was saying is...
if the another lender only pays 1800 then I still make 6000, and the Adjusted Origination goes to $4200!???
so why do I care what the lenders rates are?? i should just look for a lender with $0 Underwriting fee, so I can keep the full $6000 rather shopping for a rate with the most "LENDER CREDIT or YSP" .... it is just a credit towards the borrowers closing costs... $500 or $1000 different in "LENDER CREDIT OR YSP" doesn't really impact the loan at all. Just make it so the loan amount includes any changes or give the par rate.
i am just giving my customers the rate closest to par, and sending it to lenders with low underwriting fees and great service.
Am I missing something?? or is it that simple?
Do yourself a favor and start framing your business around looking at it from your client's perspective. They certainly care how much the ysp credit is for a given rate. If all you are looking at is your take home origination, then you are not going to be competitive with other originators.
Great Answer. |
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charlesdailey
20 Posts |
Posted - 02/20/2010 : 9:41:30 PM
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| davidfr, you are too funny!!! |
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scottee10
745 Posts |
Posted - 02/21/2010 : 6:54:39 PM
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ELI,
You and I went round after round on this in December on this issue on another thread. You are still fighting it. YSP goes to the borrower....period!!!
Whatever you put into box 1 page two of the GFE has to be dead accurate....period!!!
What has really changed here is how you present your proposal to your borrower and how honed your sales skills are. No period... :)
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ELI420
148 Posts |
Posted - 02/22/2010 : 07:10:41 AM
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Scottee,
that isn't what I am arguing... I see where you are coming from.. Total Origination is what I make MINUS LENDER UNDERWRITING FEES.
what I am saying is, that YSP is just a credit to the borrower, so Rates from the lender are much less important than they used to be.
YSP goes to the borrower not the broker, so looking at these rate sheets all day to see if I can get an extra .25 or .375... no longer makes sense, as I don't make more money ( obviously you need to be competitive, but THE BEST RATE isn't where the Loans should go)
AND MOST LENDERS THAT ARE PAYING MORE will end up costing me, as their service usually is awful...
I am saying, pick the best lender based on Service or cheap Underwriting fee, quote the client, and then close it!
Thanks! |
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AndrewSoss
1276 Posts |
Posted - 03/05/2010 : 7:16:27 PM
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quote:
Originally posted by ELI420
Scottee,
that isn't what I am arguing... I see where you are coming from.. Total Origination is what I make MINUS LENDER UNDERWRITING FEES.
what I am saying is, that YSP is just a credit to the borrower, so Rates from the lender are much less important than they used to be.
YSP goes to the borrower not the broker, so looking at these rate sheets all day to see if I can get an extra .25 or .375... no longer makes sense, as I don't make more money ( obviously you need to be competitive, but THE BEST RATE isn't where the Loans should go)
AND MOST LENDERS THAT ARE PAYING MORE will end up costing me, as their service usually is awful...
I am saying, pick the best lender based on Service or cheap Underwriting fee, quote the client, and then close it!
Thanks!
The problem with that mindset is that you will eventually not be competitive if you are eschewing that extra .25 or .375% in YSP for your client.
Or if you think about it another way, if you did find those better rates, you could justify charging more in origination since you are delivering better rates.
The sale has changed, but saying things like "rates and pricing don't matter anymore" is pretty silly.
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aguadulce
101 Posts |
Posted - 03/05/2010 : 7:16:49 PM
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Eli
I think you're still looking at it the wrong way.
Say your loan is $300,000 and you always charge 1 point.
Say Sierra Pacific has 4.875% at a .75 rebate and $950 admin fee
Say CMG has 4.875% at .375 rebate and $875 admin fee
Say both are roughly the same in service and you use them both
the same so you know both offices well.
Why would you take CMG for slightly less admin fees when sierra
is going to credit your borrower $1125 more in rebate. It totally
makes a difference if someone is paying more rebate as your borrower
now benefits that much more in it.
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ownerop
548 Posts |
Posted - 03/05/2010 : 7:59:28 PM
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the new GFE has changed absolutely nothing about how we are paid. You still charge your normal fees, the lender charges theirs, and the YSP shows as a credit but its offset by the same amount in the origination charge.
I have not had a single issue nor have I changed the way I do business. I break it down for my clients and show them how much they need to come in with and the numbers are the same as they were on 12/31/09.
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