Survey Says: How Consumers Select their Mortgage Originator

April 20, 2011 by 4 Comments

A few weeks ago, I posted a survey with three questions to learn consumers opinion about the Fed's rule on loan originator compensation and how they select their loan originator.  Here are the results.

Please rate the following based on how you will select your next mortgage professional:

  • Years of experience as a mortgage originator (72.7%)
  • Referral from someone you trust (63.6%)
  • I will return to the LO who helped me with my last mortgage (62.8%)
  • Whoever quotes the lowest rate (45.5%)
  • Type of institution (bank, correspondent lender, broker or credit union). (38.6%)

When I'm helping someone with a mortgage for a home located in Washington state, I find that a majority of my new clients are readers of my blog.  I'm also fortunate that many of my clients are referred to me from real estate agents and financial planners.  Home owners I have helped in the past also tend to refer their friends and family and return to me for their next.  I do not advertise (with the exception of my tiny ad on West Seattle Blog), I do not take "up calls" and I do not buy leads…never will.

Thank you for reading my blog and for remembering me when you or someone you know needs a mortgage for a home in Washington.  I feel so fortunate to have my business model where consumers seek my professional advice and assistance with their home loans. 

Filed Under: Polls

Survey Says: Consumers Do NOT Want Higher Mortgage Rates

April 3, 2011 by Leave a Comment

I posted a survey last week with three questions regarding loan originator compensation for people who either have or who are considering obtaining a mortgage.  Here are the results as of 7:20 this morning (click image for a better view).

LOComp1 

80% of those who took the poll would rather allow their mortgage originator to have the freedom to price rates as they choose and to be able to use their commission to help with cost after locking (typically at closing).

20% would rather that rates were detached from the LOs commission and are willing to pay a slightly higher rate in order to have this "protection" and have the LOs commission restricted from being allowed to go towards any cost.

The results are overwhelming.  Consumers would much rather leave mortgage originator compensation alone.  They do  not want government interference with how a mortgage originator is paid.   Many mortgage originators do not want this rule either even though many will actually receive a "raise" since their commission will be fixed (no pricing leaning on an easier loan) and their commission is forbidden to be used in the transaction for anything (including helping out paying for an extension or other closing cost).

The Fed's Rule on "LO Comp" has been delayed by dramatic intervervention late Thursday (the eve before the the rule was to go into effect) by the U.S. Circuit Court.  We should have more information this Tuesday.

As of right now, you'll find that some mortgage companies and banks are proceeding with the rule and others are holding back until more is learned on Tuesday.  This can make a significant difference in your interest rate so you may want to check with your mortgage originator if you're locking on Monday if they are proceeding with the Fed LO Comp rule or not. 

Mortgage Master Service Corporation is delaying following the Fed Rule on LO Comp until we learn more on Tuesday from the Circuit Court Judges.   This means that I have freedom to price and lock your rates as I see as "fair" for at least one more day.

I will be posting mortgage rates tomorrow morning on my blog "as usual".  It could be my last mortgage rate post where I'm able to quote rates based on how I want to price them.

Related post:

The Feds Loan Originator Rule is a bad April Fools Joke on You, the Consumer

Filed Under: Polls, The Fed - FOMC

Three Questions for Consumers Regarding Mortgage Originator Compensation

March 30, 2011 by Leave a Comment

The Fed has a rule that will go into effect on April 1, 2011 which will impact how a mortgage originator is paid and restrict what they can do with their commissions.   The rule is currently before a judge and may be delayed.

Please take a few minutes to answer three questions regarding mortgage originators and compensation. 

Click here to take the quick survey

Thank you!

Filed Under: Current Affairs, Polls

Poll Results: How Would You Like Your Mortgage Originator Compensated?

April 30, 2010 by Leave a Comment

Surveysays

Our poll is over and I’m actually a little surprised by the results: a majority prefers the current most common form of mortgage originator compensation.

Points, based on a percentage of the loan amount received 48.9% of the vote.   Followed by hourly, based on work performed, at 31.1%.  Paying your mortgage originator a flat fee, the same fee for everyone, came in last at 20%.

I hope the FED and Washington State’s DFI reads this… right now they’re both trying to change how mortgage originators are paid. 

Shouldn’t it be up to the consumer?  They have the right to vote with their feet.  If they don’t like how a mortgage originator feels they should be compensated, they can walk.

Our government getting involved with how an industry is paid is very troubling to me.  

Your thoughts?

Filed Under: Polls Tagged With: , ,

Poll: How would you prefer to have your mortgage originator compensated?

April 5, 2010 by Leave a Comment

How a mortgage originator is compensated is being reviewed by the Federal Reserve and Washington State's Department of Financial Institutions (DFI).   The traditional method of being paid based on a percentage of the loan amount is getting some heat.  It's unfortunate because I do believe a majority of the bad actors are no longer in the mortgage industry thanks to the SAFE Act and licensing requirements.   Those who do not want to be held to the licensing standards and who want to stay in the mortgage industry will have work for a bank, where they are only registered.  Many banks are limiting what and how a mortgage originator "appears" to be paid to the consumer.  (Only mortgage brokers have had to disclose their compensation on the back end).   

Currently, a consumer can have their mortgage priced with an origination fee (points) or without points, which means rebate pricing is being used to compensate the originator.  The loan does not have to be priced with a full 1% of the loan amount, if you look back at even recent rate post at Mortgage Porter, you'll see that sometimes I quoting 0.75% for a certain rate–it all depends on where the markets are at that moment.

I would love to hear back from my readers how you feel mortgage originators should be compensated.   I will be leaving the poll on left side of my blog during the month of April.   Please vote and feel free to leave your comments on this post.

I'll be sure to share the results with you.

The choices in this poll are:

Flat Fee:  My opinion is that if mortgage originators are forced to go to a flat fee.  Mortgage companies will still have to compensate them for their "market worth".  It's possible that although the fee might look better, the base rate (without discount points) might be higher as it will be set by the bank or mortgage company, and not the originator.

Points:  This is currently the most common method with how a mortgage originator is paid.  Points can be paid by the consumer or by rebate from the bank/lender.

Hourly:  Consumers could select a mortgage originator based on their hourly rate and an estimation of how many hours the mortgage originator estimates their transaction would take.

Filed Under: Polls, The Fed - FOMC

New Mortgage Porter Poll: Do You Care Who Your Mortgage Company Is?

March 1, 2008 by 7 Comments

As a Correspondent Lender, we work with just about ever bank and some lenders you may not have heard from.   Every so often, I’ll have a client request a specific bank.  The conversation may go something along the lines of:

Client:  Can you please lock my loan at Wells Fargo (or Washington Mutual, Countrywide, etc.)?

Me:  We work with many banks.  However, I usually select by who is offering the best rate or best product for your scenario.

Usually the client is fine with getting the best rate or product.  Sometimes, they may request to not be locked with a certain lender due to a bad previous experience.   I’ll advise the client that I won’t lock them at that specific bank; however, I cannot guarantee they won’t wind up at that bank since mortgages are often transfered.   The request to be with a specific bank has really dwindled lately.  I’m assuming clients are happy to have qualified for a mortgage with today’s tightened guidelines and to have secured a low rate.

I have been wondering…does a potential borrower care if they found out their mortgage was locked in (brokered) with a specific lender?

Would it matter to you if I lock your mortgage with Countrywide, WaMU, IndyMac, Wells Fargo, Chase, Flagstar, Wachovia or DiTech?  (Note: these banks are mentioned in no specific order and does not represent a complete list of lenders we work with).   How about a bank you’ve never heard of before?   Or if the bank was a "subprime lender" yet they offered a lower rate than a prime lender?

Voila, we have our first poll at Mortgage Porter on the right side of this page.  Please vote! 

Update:  I will keep this poll available until March 8, 2008.

Pole Results:

  1. Yes. There are banks I don’t want to support. (8)
  2. No. I don’t care. I just want the lowest rate. (8)
  3. It doesn’t matter (4)
Filed Under: Mortgage, Polls