Would these two ideas make the mortgage industry better?
1) Two appraisals required; one by an appraiser you choose and the other by an appraiser the wholesaler chooses or the correspondent buying the loan chooses.
2) If you are approved as a correspondent lender or work there as a loan officer, no need for you to broker a loan to a wholesale lender as an originator.
by the voice of reason November 5, 2012 1:32 PM
2. Huh? in that situation you would only broker if you couldn't do it in house...brokering needs to remain as an alternative, since no one lender has every loan for every situation
by Dr. Branker November 5, 2012 1:48 PM
1) No, then you've got twice the cost and the wholesale company is going to always pick their value unless the correspondents were to come in lower.
so that's a "lose lose".
2) You'd have yourself in a world of trouble per Dodd/Frank on this one. Let's say even if you could do this legally that you generate a greater yield on brokered vs. correspondent volume. You now "steer" a loan toward getting you more $ and not the best deal for the borrower. You're done!
by Driver 8 November 5, 2012 2:03 PM
Why would it be a problem with Dodd Frank? Mortgage bankers are not sending loans to wholesalers for best price, they are sending them out to wholesalers because they can't get the loan approved internally.
Keep in mind on #1 appraisals used to cost $250 and now are $450, so your twice the cost argument is also nullified.
by the voice of reason November 5, 2012 2:53 PM
Your key argument is "use to cost"! They don't anymore now do they? So the borrower would incur $900 in appraisal costs under your proposal. If I were pricing against you and had have the appraisal cost that's a no brainer.
Secondly, is your argument regarding being a compensated LO for an institution but also functioning as a broker correct?
by Driver 8 November 5, 2012 3:22 PM
I'm sorry...when did a 1004 cost $250?
Was that 1972?
and tvor, what is the justification for requiring 2 appraisals? Other than you have stock in streetlinks?
by Dr. Branker November 5, 2012 6:23 PM
1 World Savings appraisals and their 'not that appraiser' list comes to mind. You won't beat the spread and WEEKS will be added to the process.
2 you lost me at the bakery
by turdly November 5, 2012 6:35 PM
You are comparing an Option Arm company to conforming? Really? What if the second appraisal is lender discretion? Are you telling me all you brokers are OK with HVCC?
20 years ago some wholesalers ordered a second appraisal.
And why do we allow mortgage bankers to send a loan through the broker channel? You know it is because it got turned down in house. Certainly it can't be for rate. If it is, their secondary desk is being greedy. Why not have separation of bank and broker? Give me one good reason why a mortgage banker should broker a loan? If they are avoiding risk, how is that good for our industry?
by the voice of reason November 5, 2012 7:35 PM