tag:blogger.com,1999:blog-2951729905080621137.post7963289455024825454..comments2024-01-28T03:46:02.683-05:00Comments on Mortgage News Digest: Broker v. Lender: The Drive to Mini-Correspondent - Rational Response or Over-Reaction?Thomas Morgan 202-550-LOANhttp://www.blogger.com/profile/03341328785507458855noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-2951729905080621137.post-27138439651006290302013-09-11T11:47:47.753-04:002013-09-11T11:47:47.753-04:00Larry - one of my favorite pages on the internet:
...Larry - one of my favorite pages on the internet:<br /><br />http://www.consumerfinance.gov/regulatory-implementation/<br /><br />All the rules are here. BUT for QM and Comp read here:<br /><br />http://files.consumerfinance.gov/f/201308_cfpb_atr-qm-implementation-guide_final.pdf <br /><br />Beginning on Page 38. The key difference - and my next newsletter addresses this, is the difference between those fees included in the APR (everything related to the loan) and those considered in the HPML calculation - limited to actual fees you receive - not pass throughs - for your 3%.<br /><br />So if you are a broker your 3% is ONLY WHAT YOU KEEP. You don't have to worry about MIP or your wholesaler's underwriting fee, etc., etc. Title charges, too, are excluded UNLESS you own the title company Thomas Morgan 202-550-LOANhttps://www.blogger.com/profile/03341328785507458855noreply@blogger.comtag:blogger.com,1999:blog-2951729905080621137.post-49539693246887382752013-09-11T10:36:30.124-04:002013-09-11T10:36:30.124-04:00I am most concerned with what fee's will be ba...I am most concerned with what fee's will be backed out of the 3% fee cap and thus what revenue will remain and if said revenue will be sustainable for my business and my personal income requirements. I have not seen any information on what fees will be backed out so if anyone here knows I would welcome the contact. Larry@LechelMortgage.comLarry Lechelhttp://www.lechelmortgage.comnoreply@blogger.comtag:blogger.com,1999:blog-2951729905080621137.post-38490417931693216472013-09-08T10:09:41.332-04:002013-09-08T10:09:41.332-04:00There have been some great points in response to t...There have been some great points in response to this article.<br /><br />1.) Nothing prevents a broker with a mini-corr arrangement from brokering to another investor. Many banks also broker loans. But there is pressure to use the mini-corr line for a propensity of the business, if the purpose of the arrangement is to avoid disclosing fees or other aspects of the broker regulatory construct, right? I mean, if the reason for going mini-corr was to maximize revenue, as opposed to providing the best deal for the borrower on a transparent basis, would you broker a loan if it meant that you couldn't charge as much? Maybe if it was the only way you could get the loan approved.<br /><br />2.) One commenter said that the fact that you may encounter a buy-back doesn't mean that you will actually incur that loss. True. You can mitigate secondary market losses: we have a policy and procedure for this as well:<br /><br />http://www.mortgagemanuals.com/singleplan-secondary.htm<br /><br />But the time spent on loss mitigation can really take away from the amount of time you spend on your business. Brokers need to be aware of the fact that, just because you can mitigate a risk, this does not mean that the risk doesn't exist. <br /><br />Actually, the point is simply that the broker mini-corr model doesn't necessarily provide the benefits it is being sold as. The point is not that warehouse lending /correspondent lending does not provide a tremendous value. And "mini-correspondent" provides a step up for the emerging banker. But there is limited utility for the mini-correspondent model.<br /><br />Defining mini-correspondent: 1.) captive warehouse line - funding most or all loans for sale to the warehouse lender 2.) no delegated lending approval - pre-approved loans only 3.) may or may not include drawing docs. Loan funds on broker's warehouse line and is purchased from warehouse line 7-14 days after funding.<br /><br />The specific reason brokers want this mechanism is to avoid the disclosure of the broker fee and the ability to collect additional fees above the 3% limit allowed for brokered transactions. In addition, there is a minor advantage is avoiding adverse selection for loans which may become HPML. Most of the brokers I have surveyed aren't getting anywhere near 3 points on a loan. Would you recommend mini corr to them?Thomas Morgan 202-550-LOANhttps://www.blogger.com/profile/03341328785507458855noreply@blogger.comtag:blogger.com,1999:blog-2951729905080621137.post-29613499417042425572013-09-06T12:46:15.596-04:002013-09-06T12:46:15.596-04:00The debate over the Mini-Corr as some sort of pana...The debate over the Mini-Corr as some sort of panacea continues... Rob Chrisman opining in Mortgage Daily <br /><br />http://www.mortgagenewsdaily.com/channels/pipelinepress/09032013-joint-ventures-mini-corr.aspxThomas Morgan 202-550-LOANhttps://www.blogger.com/profile/03341328785507458855noreply@blogger.com