I received a call from an agent I have worked with for 9 years with a concern over a buyer of his not being able to get financing because the REPC is written up for two parcels, one with a house and one vacant piece of land. The house appraises for well over the purchase price so I illustrated that they could split it into two contracts one for the $425,000 parcel with the house, and one for the land for $1. They took this back to their lender and they agreed that would work.
Through this process, I got the chance to illustrate that I can offer his a better deal because rates have improved significantly since he locked in early April. The issue is this - My lender paid compensation plan is set up to pay me 2% of the loan amount. This is because lenders seem to be staging borrower paid plans about .25% less than lender paid. Because of this, the borrower paid plan at 4.625% is not competitive because I need to be paid for what I do, but the lender paid plan at 2% is making me so much money that the borrower is angry when this is illustrated. I would be happy to pay all of his other closing costs out of my commission, but that is not allowed.
You are probably asking why I don't switch my contracted lender paid percentage. Because on a high loan amount like this one $340,000 I would make $6800, but on a lower loan amount typical for this area I would only make $3000 on a $150K loan. Keep in mind, no other fees may be collected so you better learn how to process your own loans. A 1% lender compensation model is not sustainable. 2% is the minimum that anyone should be set up on.
It just sucks that I can't pay the rest of his closing costs for him leaving him to feel like he got the best service and rate in the world. Ben Bernanke is idiot. An idiot who is in charge of the most corrupt shadow entity in the world.
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