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NAHB Wants to Keep Their In House Lender? WOW!

National Association of HomeBuilders is suing to retain the ability to control mortgage lending! WOW! Keep Your Fingers Crossed! Who's surprised by that??

According to Inman News: "Federal housing regulators have agreed to delay for 90 days implementation of a rule change that would bar home builders from offering consumers incentives when they agree to use builders' affiliated mortgage and title insurance companies."

We've seen first hand how well the affiliated mortgage companies work! We were told last month by a CTX onsite agent that it was AGAINST THE LAW for the buyer to use someone other than THEIR mortgage Company!

We have builders here who are charging you $12,000 more on your home - just so you can take advantage of the financing package!

Builder Controlled Mortgage Groups have the wrong perspective! Let's keep our fingers crossed that they do not remain the "norm."

If you have questions about alternatives to the Builder's Mortgage Group - Call us!

Posted by Eleanor Thorne 919-649-5057 Cary Mortgage Loans on 01/12/2009 01:00 PM

Comments (9)

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Originally posted at: Mortgage Lending, NC Style: NAHB Wants to Keep Their In House Lender? WOW!

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9 Comments on NAHB Wants to Keep Their In House Lender? WOW!

JAN

While I deplore deceptive practices, I think it is not right to limit a way of doing business (in-house) just because consumers are too lazy to do their own homework. By "outlawing" this option, you're actually diminishing competion.

The answer is not MORE regulation, it should be more EDUCATION. Which translated means more marketing opportunities for the independent brokerages.

Eleanor,

Let's see how accommodating Mike Michaud would be if the builders wanted his piece of the pie!

Mike in Tucson

Mike:

Everyone wants my piece of the pie! Either as a builder (which I am) or as a Broker (which I am).

I object to the legislation on the grounds of personal choice and freedom. America was not a nation founded on legislating who does or does not get financial opportunities. However, that's where we've gone!

Perfectly legal and legitimate business relationships have been outlawed becaue of lazy consumers!

I'm sick of it.

People need to grow up and take responsibility for themselves.

I have seen this as well. Some tract builders will do and say anything to get the buyers to use the affiliated company. It hurts us all and our buyers for them to not have a choice in shopping.

Mike (and Mike) I appreciate your comments... The problem I have is when a builder is inflating the price of the home for financing - and ONLY paying closing costs if you use the in house lender. Seriously! The builder rep told me and my client it was AGAINST THE LAW for the client to use me and not take the builder's closing cost. The builder's mortgage company FURTHER told my buyer that USDA rates were SET and that everyone had the same rate... this is an educated consumer who is being LIED TO. If I thought this was a rare situation, it would be different, but unfortunately, it's not rare. In several NC communities, we have WHOLE SUBDIVISIONS that are going into foreclosure because the builder's mortgage company put people who didn't really qualify in the house! This is why the National Association of Mortgage Brokers OPPOSES Affiliated lender/builder arrangements... IMHO.

Eleanor, I agree with you that what the builder's rep is doing is dispicable.

If your client is educated, then why is this a problem? He should know he has options. And if he doesn't and you know he does, you can tell him.

There's no recourse in your state for reporting such deception and showing your client that he does indeed have options? Seems like a perfect negotiating tact to take to get a real killer of a deal!

Just because you're dealing with illegal and stupid builders doesn't mean using an affiliated mortgage company has to be outlawed.

Just look at what's been happening to the RE and mortgage professions and all the unnecessary regs put in place because of buyers not knowing what they can and can't do.

We all know how mortgage officers and brokers can "juice" deals to make large money up front just by inching the rate by a fraction of a point.

This is a bit like my kids fighting "did too", "did not!".

Mike... the reason this is a problem is that CTX will only pay for upgrades in the home (not closing costs) if the borrower uses their mortgage company! That's the problem! $12,000 BRIBE to get a mortgage loan? It's not right, that's why we need a RESPA change.

So you find another builder. They're certainly not the only game in town.

Also, you and I both know that the upgrade "price" isn't the cost to the builder. Their $12K actually is costing them around $3-4K.

Its all a marketing game.

The RE brokerage I was with actually got Pulte to waive using their mortgage company when we brought our clients by. We still got all the incentives and our clients got to use a different mortgage co.

If you walk, you'll see how fast they change their tune.

I've done it on more than one occassion.

Side note: You're obviously in the mortgage biz. Who brought the buyer to CTX? Were they a walk-in, a RE agent? The reason I'm asking is that if you're trying to do the deal after the contract is in place, you've lost your negotiating power and the ball game.

JAN

Eleanor,

Great post. I appreciate you telling the facts as they are. I always put the folloiwng type clause in my new construction contracts, "If the buyer chooses to use an outside lender because the builder's mortgage company can not be as competitive, the buyer will still get the builder's offer of $3,000 in closing costs."

The intent here is to still get my client the closing costs. I know that in most situations, the buyer is going to be able to get a better loan elsewhere. Most if not all of my new construction clients have gone elsewhere and they have still gotten the closing costs!

Jodi Bakst, Chapel Hill and Durham, NC (www.TeamJodi.com)

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