Ok, loan guys, you are up next!
My entire public blog is dedicated to revealing all the Myths Tricks and Truths from Realtors.
Now I'd like to dabble in revealing a lending trick that many consumers and some Realtors might not realize.
What they don't realize is HOW lenders really get paid. It is obvious for Realtors based on our public commissions, lenders fees are backloaded, front loaded or sideloaded. I dont mind people making money. I dont mind people making a lot of money. I DO mind their customers not understanding HOW they make money.
Consumers call a lender and they get a quoted rate. What consumers don't know is that a lender is actually looking at a piece of paper that essentially says on the top "What would you like to make today" On the left hand side are 3-6 rates and on the right hand side is their commission. The higher the rate, the higher the commission.
Some lenders will pick one line and stick to it (a great way) but some will go fluctuate. Here is a possible translation:
ACTION) "Mary Sue said that I MUST use you, no questions asked, since you were that good."
RESULT) Rate is quoted 1/4th of a point higher. No competition, equals more profit
ACTION) "Hello I am talking with 2 other brokers, what is your rate"
RESULT) Lender scrolls down the sheet and quotes a lower rate.
Mortgage guys, am I a complete idiot and off base here?
And I am NOT an advocate of beating down 3 or 4 lenders until the cheapest guy wins. My mom used to do that.
Next up, my points debate! Who is pro points and in what circumstances?
Frank
(let me know about typos, it is late and I dont like looking stupd.)
;-)
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