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Jack M. Guttentag The Mortgage Professor

Jack M. Guttentag, The Mortgage Professor

Protecting Borrowers Against Opportunistic Pricing

by Jack M. Guttentag

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Posted on Tuesday, July 8, 2008, 12:00AM

Last week I reported favorably on one part of HUD's (the Department of Housing and Urban Development) current reform proposals. A new and substantially improved Good Faith Estimate (GFE) would make it easier for borrowers to shop alternative loan providers (LPs). The proposed GFE, along with new rules as to how it must be used, will also eliminate critical weaknesses of the current GFE that encourage opportunistic pricing -- the practice of charging as much as you can get away with.

The current GFE is an open-ended list of settlement costs with no meaningful subtotals, encouraging lenders to invent new charges. Further, all of the charges on the current GFE are "estimates" subject to change, the only barrier to abuse being the "good faith" of the LP. In all too many cases, charges are raised in bad faith and there is nothing HUD can do about it.

In the proposed GFE, settlement costs are divided into three categories. Category one includes all charges by the lender and mortgage broker, tabbed Our Service Charge, and government recording and transfer charges. At settlement, these charges must be the same as those on the GFE. This rule is completely appropriate regarding the lender's own charges; it is also long overdue. Charges by governmental entities are another matter; my experience suggests that these charges belong in category two, where the LP has a little latitude.

A Dysfunctional System

The second category now consists of services provided by third parties who are selected or identified by the LP. The most important of these is title insurance. The total of such charges can be as much as 10 percent higher at settlement than the total shown on the new GFE. This limit is better than no limit, but it doesn't touch the dysfunctional system that makes third-party settlement services far more costly than they should be. I comment on this further below.

The third category consists of services that the borrower has elected to shop among service providers not selected or identified by the LP. It includes homeowners insurance, which borrowers typically purchase on their own, and it can also include title insurance if the borrower solicits title agencies on his own. These charges are not subject to any limits on price increases. This is a reasonable exemption.

To help borrowers police their own transactions, HUD has proposed to change the HUD1 closing document so that it corresponds closely with the new GFE. It will then be easy for borrowers to compare the final charges on the HUD1 with those on the GFE. Good idea.

Another Good Idea

HUD also intends to seek authority to require that the HUD1 form be made available three days before closing, rather than one day, which is the current requirement. Another good idea, but they ought to include the mortgage note in this requirement. There is no excuse for forcing borrowers to confront a complicated contract for the first time at the closing table.

The most disappointing part of the proposed new GFE is that it leaves untouched the odious network of relationships between loan providers and third-party service providers, which raise the cost of these services to borrowers. Mandating that a title charge of $1,000 on the GFE can't be more than $1,100 on the HUD1 closing document doesn't accomplish much if the charge ought to be $300.

Perverse Competition Encourages High Prices

While it is not possible to know what the charge would be in a properly functioning competitive market, we do know that the perversely competitive markets we have now encourage high prices. Competition is perverse when service providers market not to purchasers but to the entities that refer the purchasers to them. The LPs who refer mortgage borrowers to third-party service providers share in the overcharges -- sometimes legally, sometimes not.

The remedy is well-known and well-tested. It is to require lenders to pay for all services that they require from borrowers. If lenders want title protection, they should buy it and pay for it, passing the cost to borrowers in the rate and points. The cost passed through will be a small fraction of what borrowers pay now, since lenders are large and knowledgeable purchasers who can buy in bulk.

This is not a pie-in-the-sky idea. Indeed, since Bank of America adopted it last year, it can be viewed as an industry "best practice." Yet HUD, despite its legal mandate to lower settlement costs, ignores it. If this reflects HUD's concern that they will receive no support, they are surely mistaken. If it were placed on the table, community groups would have to support it -- how could they not?

To be sure, the mortgage bankers would oppose the idea, because trade groups can't advocate best practices without alienating a major segment of their membership. But the fact that a leading lender has adopted it voluntarily and successfully will make it difficult for them to argue that the market will collapse.

Next week: How broker charges are handled in the new GFE.

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  • Brodie - Sunday, July 13, 2008, 10:05AM ET  Report Abuse

    • Overall: 5/5

    Dr. Guttentag appears to have struck a raw nerve with some of the disgruntled mortgage brokers out there, especially those who have been abusing the unregulated envirionment to profit at the expense of buyers. Sure, there are good brokers, and there are lying and deceptive and ignorant buyers, but these are not excuses for perpetuating a system that is wide open for abuse from all sides. We have tried the free hand of "the market" (mimized regulation) and the abuses ran rampant, driven by incentives skewed toward profiteering, and it has shaken the entire world financial system -- and we haven't seen the bottom yet. Dr. Guttentag isn't just a blow-hard columnist, he's a retired finance professor from the Wharton School and consultant to the mortgage industry -- he knows the best and worst features of the existing market intimately. We ignore him at our peril (regardless of what the blow-hard, self-serving mortgage brokers who are clogging up this comment board might say).

  • Yahoo! Finance User - Sunday, July 13, 2008, 1:33AM ET  Report Abuse

    • Overall: 1/5

    All these articles on the mortgage mess are retarted. They all state the same obvious thing, that of which already happend. These morons wouldn't dare speak of this mess when the dow was near 14,000 but now all of a sudden everyone is an expert on the subject and can tell you exactly what happend and why. All these yahoo columists are dopes. All of this information is already priced into the market so you cant make any money off any information out there. Also, none of these columists will ever tell you how to make money off a certain trend. All these guys including Siegel are all the same. They tell you what happend after it already happend. This serves no purpose to anyone. As for what the market will do. Who cares? If you just buy businesses in the market in great companies after they sell off, youll do fine over the long term. Stop listening to these dopes. None of them probably ever made a cent in the stock market. Otherwise they wouldnt be economists!

  • James E C - Saturday, July 12, 2008, 4:22PM ET  Report Abuse

    • Overall: 3/5

    Unfortunately, the government does need to set responsible parameters and forget about special exceptions to help the poor "minorities". On the surface, in this age of "PC" it sounds good. But, they generally end up hurting much more than helping. It's been many years since I have been associated with real estate lending but did go through the "Savings and Loan Crisis". The "Savings and Loan Crisis" brought to you by the implementation of foolish, government regulations, (reducing tax write-off to unrealistic short periods for commercial buildings, limited partnerships owning buildings and then passing these tax write-offs through to the limited partners, bullet proof general partners, securitization) largely aided and abetted by the NAREB. Which group or groups applied pressure to Freddie Mac and Ginnie Mae to accept subprime loans? Now let me guess. Talk about a unioun that has gotten out of hand. NAREB! Benanke was wrong to step in and bail out imprudent business organizations. "Stop the dominoe effect". BS. But, Mr Bernanke is just a minion of Wall Street. That is most likely where he will go when replaced. Why not pluck the public some more in order to get the large, fat bonuses when failure has no consequences.

  • Scott - Friday, July 11, 2008, 12:30AM ET  Report Abuse

    • Overall: 1/5

    Funny how a few years ago the government was demanding that the banks lend money to the Poor and minorities, etc. Everyone should own a home, etc. Now that it is clear that people without money cannot afford the payments, the government blames the lenders..... Once upon a time, there was a concept of "let the buyer beware." As long as there is full disclosure, the government cannot regulate away stupidity--On the part of a Bank or a purchaser. Let the banks fail. Let the foolish file BK (and learn a lesson).

  • Yahoo! Finance User - Thursday, July 10, 2008, 12:10PM ET  Report Abuse

    • Overall: 1/5

    Jack, The good faith estimate is still going to be an estimate. There are too many factors that could change in the process to make it exact. If it were exact it would be called a HUD1. However, you are completly forgeting about the Truth in Lending disclosure. The main purpose of this disclosure is to help the consumer shop lenders. The higher the fees = higher APR. If borrowers use the APR to shop loans then really what difference does it make what is on the GFE? As a mortgage broker for the past 7 years I could show you how I can charge virtually NO costs on the GFE, but stick the borrower with a higher rate. That is why we have the APR. Before you write another article I would sugest talking with a few mortgage brokers and ask them thier take on the new GFE. Personally I don't think there is anything wrong with it, but keep in mind the reason we have "brokers" is because they have the ability to use different banks that fit the needs of the borrower. With different needs some times different fees are involved. As for your Bank of America comment, I reccomend before you think they know what they are doing lets just see what a good buy they made with countrywide.

  • Paolo - Thursday, July 10, 2008, 10:19AM ET  Report Abuse

    • Overall: 2/5

    1. Ban securitization of mortgages. 2. Dissolve the FMOC and set Federal rates mechanically - aiming to balance public and private debt and national savings. 3. Bring back Glass-Steagall and put a firewall back between investment banks and commercial banks. 4. Do not bail out the idiot speculators at investment banks, that is - follow the current law Mr. Bernanke!

  • Yahoo! Finance User - Thursday, July 10, 2008, 4:12AM ET  Report Abuse

    • Overall: 3/5

    The answer to the mortgage mess is simple. Get Wall Street out of the picture. In good old days the bank or the S&L wanted 10 to 30% down, and they held the mortgage. Because they were on the hook, the bank verified your job and income status and checked your credit rating. In the era of modern finance, most banks do not keep mortgages but sell them off to be packaged into those now famous CDO's and SIV's and what ever derivative that came along. Why should they care if they loaned to a complete loser, it was going to be a Wall Street sucker or the Feds who were left holding the bag. Too bad so many bankers, blinded by the huge bonuses, kept some of those mortgages or bought CDO's thinking they were safe. Those lenders are now paying the price for their greed and many of them will go belly up. Don't blame the buyer for buying too much house when if the lender did his job the loan would never have been made. Same with the credit card companies. As long as Wall Street and their fellow travelers are involved in mortgages, oil, commodities, or anything else, the crooks are going to come out of the woodwork and the little guy is going to pick up the tab.

  • Yahoo! Finance User - Thursday, July 10, 2008, 3:01AM ET  Report Abuse

    • Overall: 5/5

    The professor is telling it like it is...insightful. But it sounds like some grumps below don't like the mess they've gotten themselves into! -Content renter.

  • Yahoo! Finance User - Wednesday, July 9, 2008, 10:53PM ET  Report Abuse

    • Overall: 1/5

    Zero stars would be more appropriate. More regulation, more red tape ALWAYS= More Cost to the Consumer. Why did we ever get the Federal Gov't involved in the first place?? Where's George Bailey when we need him??

  • TED - Wednesday, July 9, 2008, 9:26PM ET  Report Abuse

    • Overall: 1/5

    If there were a way to rate this (and the rest of the "Professor's" stuff) at 0 stars, I imagine all these 1 ratings would be 0's. If more regulation and less personal responsibility is the answer, I say we all just get a mortgage from the government. Take all the banks out of the picture and just go to the Social Security or unemployment office and stand in line for a mortgage there. Hand over your $1000 application fee and we'll call you in a few weeks if we feel like it. That's what we need! Maybe we should buy cars from the government too so we don't get ripped off there. How about insurance, medical care, and all financial services? I'm a loan officer (was also broker for 8 years). I bring my initial GFE's to close to compare with the final, and if anything changed I tell my customers why! What isn't addressed in the article is that title companies would be the accuracy police under the proposed changes, and that if the fees were out of compliance, the closing couldn't take place. Wait until the realtors start losing commission checks because the appraisal bill came in $50 too high! Won't buyers be delighted when they are told they can't close on their purchase as planned because the tax service fee wasn't disclosed! Also forgotten is the fact that the HUD reform mandates binding GFE's, meaning if a loan provider puts out a GFE he'd darn well better have locked the rate. Locking loans that never close is a very expensive hedging proposition, and you can guess who will end up paying higher rates because of it. HUD also estimates that the new GFE will end up costing consumers about $75 each up front due to the time and hedging expense involved. If people have to shell out $75 in advance just to get a single Good Faith, do you think they'll really go out and compare multiple lenders the way they're free to now? Postponing closing for 3 business days sure seems like a great idea too. The underwriting, appraisal, title search, final HUD won't get done any faster, the only difference will be the additional wait and the cost of longer locks and/or extensions. I'm sure that's in consumers interests to have to pay those additional fees too, or possibly lose the lock and have no rate protection in a rate market that changes hourly at times. Remember one of the world's three most famous lies: "I'm from the government and I'm here to help you!"

  • Bob - Wednesday, July 9, 2008, 9:00PM ET  Report Abuse

    • Overall: 1/5

    I only read Jack's articles to see if he can out stupid the last one. He did it again. Congrats!!!!!!!!!!!!!

  • troy o - Wednesday, July 9, 2008, 8:58PM ET  Report Abuse

    • Overall: 3/5

    For all of you morons who don't know what you are talking about posting about this topic, you need to READ THIS. First of all, brokers are not to blame for the housing bust and foreclosures. For those of you who think that brokers are rip off artists, let me educate you on how the mortgage business works. When you go to a broker for your loan, the broker can be compensated by the lender based on the interest rate. The higher the interest rate, the higher the compensation. This compensation is called a Yield Spread. What you need to know is that banks also make a Yield Spread Premium (aka profit) but they are not required to disclose it! So before you start running around crying about your broker making money, why don't you ask your bank how much money/yield spread they are making for the interest rate they are quoting you. If they tell you they dont have yield spread because they are a bank, they are a liar. If you think a bank charges you the same interest rate that they pay for their money your crazy or naive. They have profit built into the rate, they just don't have to disclose how much profit it is because it is staying internal. The only time a bank discloses their profit is when they are reporting their yearly earnings to the stockholders, wall street, etc. So get your facts straight people. Do brokers make a lot of money? Yep. And every single penny is disclosed. Do banks make a lot of money? Yep. And very little of their profit is disclosed. I am not saying there wasnt some bad brokers out there. There was. Too many of them. But there were just as many bad bankers out there. Dont forget where brokers sent their loans. They sent them to the banks! And another thing; the bank offered the exact same programs through their retail lending divisions. And lets not forget the homeowners themselves. Some of them did get duped by a banker/broker. But most of them bought WAY out of their price range. I mean come on, someone making 60k per year buying a 800k house? What the hell is that about? What planet are you from? At what point is the consumer responsible for their own actions? I mean seriously, you are borrowing hundreds of thousands of dollars and you dont bother to read your loan papers? Is change needed? Yes. But it needs to be a change that effects all lenders and brokers. It needs to be simple for the consumer to understand. There should be more stringent licensing requirements. There should be tests to determine that you are able to recommend the proper loan for each clients needs. You shouldnt be able to go from selling used cars on Monday and doing mortgage loans on Tuesday. There is a problem with that. Don't believe me? Look at our housing market. I am a mortgage broker. I also happen to belong to the upfront mortgage broker association. Want to see how all lenders should conduct business? Visit the UMBA website. I am a licensed mortgage advisor in Nevada. Out of 4600 licensed mortgage brokers, I am one of only 2 that belongs the the UMBA. Pretty dismal. Guess what, there are no banks that belong to the upfront mortgage lenders association. So before you guys start placing blame, try to know what you are talking about. Troy

  • Reality Check Time - Wednesday, July 9, 2008, 8:19PM ET  Report Abuse

    • Overall: 1/5

    I LOVE this... Pleeeeease Lawmakers... Add all of the RED tape you possibly can! The harder/more confusing you make it the more housing will continue to crash and the more properties I can buy for pennies on the dollar. GOD bless our Lawmakers. Georgia Lawmakers made a similar mistake 5-10 years ago (Trying to PROTECT consumers) and it caused property values to crash. I could but properties for 20-25K previously valued at 80-100K. Everyone call your lawmakers and let's Get'r DUUUUNE already!

  • Landy Johnson - Wednesday, July 9, 2008, 5:42PM ET  Report Abuse

    • Overall: 5/5

    To: Yahoo! Finance User - Wednesday, July 9, 2008, 2:38PM ET. Let me get this straight -- your solution to the current financial crisis that in large part was created by brokers wrting loans that had no hope of being repaid is to allow these brokers to continue to screw-over home buyers? Let me guess, you're one of these brokers, aren't you? The people that applied for these loans that they couldn't repay are a fault, too, but who's the bigger fool? The one asking for a loan he can't repay or the idiot that gives her the money? These reforms make a lot of sense to me.

  • Yahoo! Finance User - Wednesday, July 9, 2008, 5:10PM ET  Report Abuse

    • Overall: 1/5

    Dear Jack ! Mortgage business is down for right now. Please,wait till it get up. It is unwright and unhuman to kick somebody when he is down.

  • Yahoo! Finance User - Wednesday, July 9, 2008, 4:28PM ET  Report Abuse

    • Overall: 1/5

    its all become fuzzy math

  • Yahoo! Finance User - Wednesday, July 9, 2008, 3:44PM ET  Report Abuse

    • Overall: 5/5

    All these idiots that are complaining are likely brokers that have had their incomes cut by 75% or more. To say that the current process isn't crap is ridiculous. I have some close friends in the industry, and I've never seen a more corrupt and screwed up system. When I sit at a closing table to spend $200k, am I really supposed to walk away for $800 after spending a month getting everything ready? I also knew someone who refi'd and when they never received their check, hired an attorney, only to be told that the broker was blaming the loan company and vice versa, and it would cost more to recoup the loss than it was worth. Not to mention, I have a friend that is a broker, and the amount of money he made during the boom for very little work was outrageous. Oh, and lets not forget that he blackballed appraisers that wouldn't get his value for him. Get a grip on reality, morons. Anytime people are critical of something that is supposed to help the consumer, its obvious which side of the fence they are on. For my first purchase, I dealt with numerous BS brokers, but I was able to take the time to weed through them. And it took time that I doubt everyone has. My second purchase, I simply informed them up front that if the closing doc's were off, I would walk away, no questions asked. But seriously, considering it takes 2-4 weeks to close, is it fair to suddenly ask for a check at the table? I hope that if those of you being critical of this article are brokers or agents that rode the boom with no concern for the little people, I hope you've seen your business dry up and you're across the street trying to get a job as a fryguy. And guess what, that $400k house you bought 2 years ago? I don't think you'll be making the payments for much longer.

  • Yahoo! Finance User - Wednesday, July 9, 2008, 3:39PM ET  Report Abuse

    • Overall: 5/5

    Absolutely good ideas for consumers! It puts lots of pressure to brokers.

  • Yahoo! Finance User - Wednesday, July 9, 2008, 2:38PM ET  Report Abuse

    • Overall: 1/5

    If I could give this article zero stars I would. It is short sighted and its only purpose is to distract. The mortgage industry is in serious trouble. Calls have already been made by responsible bankers to nationalize Freddy and Fannie. The large banks have borrowed huge sums of money from the Fed at .01% interest and are sitting on the money. Why? Because they are seriously worried about liquidity and are holding on to every dime to cover the costs of and losses from foreclosures. As home prices have dropped they are now affecting home owners who have good loans not just subprimes. If a person who took out an 80% loan and had the income to pay the loan is now trying to sell, they are likely looking at having to take a serious loss as the price of their home is below the mortgage amount. Anyone who has to move for a job or whatever, with an 80% loan is looking at a serious financial problem. In addition, the regional banks are in very serious trouble. Many regional banks have seen their stock prices drop into the $2 to $3 price range, usually from somewhere in the $10 to $20 range. Many bankers fear that some of these large regional banks will fail because of the foreclosure rate. This would be a disaster for the mortgage industry and the FDIC. Things are bad. They are not going to get better soon. We do not need band aids intended to hide the real problems. We need solutions and they had better come soon or we are going to be talking about the depression instead of the recession.

  • Yahoo! Finance User - Wednesday, July 9, 2008, 2:13PM ET  Report Abuse

    • Overall: 3/5

    The Fed's artificially low short term rates and bank's continueing to charge high mortgage rates is designed to bail out the banks. (And consequently run up the price of oil because of the resulting weak dollar).

  • greg - Wednesday, July 9, 2008, 2:06PM ET  Report Abuse

    • Overall: 1/5

    I work for a large bank and have worked for broker's in the past. There are bad agents on both sides of the fence. Meet your loan consultant face to face and have them explain charges to you in detail. Having a well staffed title and escrow company is worth the price. We are working with a lot of discount title/escrow agencies due to the Foreclosure market (long subject) and it is a nightmare. This article is just bad.

  • Zoulou3 - Wednesday, July 9, 2008, 1:49PM ET  Report Abuse

    • Overall: 1/5

    This guy is hurting the mortgage business not helping it. Bad advice as usual. The transparancy should have been on Sub-prime mortgages and broker not Conforming side. They (Gov't) again has killed more jobs. Oh, that big Stimlus check the Gov't and our politicians find all kinds of ways not to give you your $$ age bias, if you have back taxes you lose your check- tell me how that helps the economy - I need this check for wedding expenses but because i still owed this year's taxes -the IRS took it all. So Stimulus help. Gov't screws us again.

  • pbergn - Wednesday, July 9, 2008, 1:44PM ET  Report Abuse

    • Overall: 1/5

    Best defense against opportunistic pricing is to allow the free market to balance the prices. Mr. Guttentag is forgetting the fact that money is a resource, and it can be bought, sold and lent just like anything else. There is nothing wrong with current mortgage process or GFE or HUD1, or whatever. Again, the author is trying to pin the blame on current regulations, processes, dishonest mortgage brokers, etc. Selling mortgage is like selling a car or anything else. So, there is nothing wrong having a mortgage broker, and if he/she overcharges, the borrower is free to walk away to the competitors. As I have mentioned in my previous postings on this subjects, the GFE is pretty accurate these days, and the mortgage brokers go out of their way to find the best possible loan for the borrower, since they have a vested interest in closing the deal and make the borrower happy. To start changing the rules, introducing new ones, and more paperwork, will only make things worse. The root cause of the mortgage and overall Financial Industry meltdown is the sharp decline in earning opportunities for common American workers due to job outsourcing, inflation and influx of foreign guest workers. The consumer confidence of the US population is in tail-spin. So, what do you expect to happen? People naturally won't be able to meet their commitments as borrowers... So much for the Mortgage Professor in explaining us the root causes, what is good for the borrowers and how to protect them. What a shame!

  • Red - Wednesday, July 9, 2008, 1:43PM ET  Report Abuse

    • Overall: 1/5

    Well said, Craiglitton! As a mortgage business professional I am tired of hearing the sob stories. Even if a customer were 'duped' by a mortgage broker into inflating their income on the loan application to qualify for more money than they could possibly afford to repay, they have to sign the application verifiing that the information was correct. They are 99% responsible for their 'dire' situations because they chose to LIE, even if they only did it by proxy. I can't believe that people have the nerve to bring lawsuits against lenders because they (borrower) suddenly can't pay their mortgage. The logical thing would be to live within your means instead of trying to impress people with a big expensive house that you really can't afford.

  • Chuck - Wednesday, July 9, 2008, 1:42PM ET  Report Abuse

    • Overall: 1/5

    HUD is a joke! It has done absolutely nothing to fix any of the abuses that are so common in the biz. This is one of those gummint agencies that always make me think of the lines from the Indiana Jones movie when the gummint rep responds, "we have TOP people working on it... TOP people..." Yeah, we have TOP people working on the housing problems in this country - TOP people. What a freaking joke! Take a good look at the "teeth" in the current regs. They are available online. A slap on the wrist - if caught - and limits for massive violations. Why the real estate ownership transfer process is such a burdensome money-intensive transaction is prfectly clear to me - FOLLOW THE MONEY! And, don't expect anything to change. After all, if they have no bread - let them eat cake! Hahahahahaha

  • Yahoo! Finance User - Wednesday, July 9, 2008, 1:35PM ET  Report Abuse

    • Overall: 4/5

    I'm glad somebody is finally arguing that more tranparency is needed. I think Jack is a little too hard on the new forms. All I really wanted to know was that when I saw my good faith estimate it would be within say 10% of my final closing, this new good faith estimate is even better by preventing the lender from changing their own fees. As to his Bank of America idea, let BoA use it as a marketing ploy, if home buyers demand it BoA's system will dominate.

  • Yahoo! Finance User - Wednesday, July 9, 2008, 12:35PM ET  Report Abuse

    • Overall: 1/5

    Unfortunate that Jack has never seen a borrower across his desk for a loan application. The current HUD-1 Settlement statement exactly matches the current GFE, line-by-line, matched by number. The new proposed good faith is vastly more confusing to a borrower. After almost 36 years in lending, I have yet to see a buyer ever read any of the 50 some pages of documents we present to them application (this includes all the state required doc's in my states). They trust these loan officers. I made a comment to an associate of mine who is at a very high level at BOA, that the problem with the mortgage brokers these days is they are all "salespeople", and selling is not what the mortgage business is or should be. Listen to the crap that is spewed on the radio commercials: "I invented the no closing cost loan", "we refi you every time the rates drop and charge the lender for all the fees". Souds like Al Gore who invented the internet. Inventing more documents is just one more step in the politicians making a "fee good" jesture for the public eye. Spend more money on enforcing the current regulations. Buyers should be represented by attorneys for the largest financial transaction of their lives. Unfortunate that in some states attorneys don't practice real estate/mortgage closing law. Hey Jack, go back to teaching in class and keep your uneducated opinions to your self. MJ

  • David - Wednesday, July 9, 2008, 12:32PM ET  Report Abuse

    • Overall: 1/5

    This guy is trash and his articles are trash as well. Yahoo - wake the F up. This guy is a joke, his articles have no bearing on what is really going on in the marketplace. What about banks??? They don't have any transparency . . . are the inherently "evil" as this d-bag thinks about most broekrs who don't pay for his "upo front" service? Scammer . . . just like the BBB.

  • Steve S - Wednesday, July 9, 2008, 12:31PM ET  Report Abuse

    • Overall: 1/5

    Phillips and sudsy...i couldn't agree more!! As a "mortgage consultant" or whatever you want to call me the one thing i see everyday is homeowners looking for "free loans". While they go out everyday and pay for this, and pay for that, they want a free mortgage. If it weren't for people like myself, how the hell would you get a mortgage anyway? And what makes you so special you think you deserve a free mtg? Compromises are usually made in business transactions but if you are reading this and you are a homeowner, don't call my job looking for free work because i would certainly not expect that from you.

  • Yahoo! Finance User - Wednesday, July 9, 2008, 12:06PM ET  Report Abuse

    • Overall: 3/5

    As a fairly "sophisticated" borrower, I'm extremely frustrated by "lenders" that, from the outset, intend to "sell the paper" at closing. Clearly, this makes the "lender" a "mortgage broker"...and undoubtedly the borrower is "paying up"....otherwise there would be no vig. I'm in the market for a mortgage now and on confronting my "lender" I was told that the paper would probably be sold to Wells Fargo. I asked, "Why don't I just go to Wells myself?". I was told they wouldn't give me a better rate and in any case, they would charge an "origination fee". WTF? "Tranparency" may mean no more than you at least know how you're being screwed. You'd think, after the recent (and ongoing) mortgage debacle, "lenders" would be a bit less aggressive. Not yet.

Showing comments 6-35 of 59<< PreviousNext >>

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