Excuse Me? We Already Negotiated Your Rate!

Mortgage and Lending with Guaranteed Rate, Marin County, CA NMLS: 22343
RPM Mortgage in California

Excuse Me?  We Already Negotiated Your Rate!


"Wait!  Who's we?  What are you talking about?  I'm the customer --- I negotiate the rate with you, the loan professional.  You don't negotiate it with someone else.  Hold on!  That's not fair!  How can you do that to me?"
OK, so that is the last joking you're going to see in this blog post, because, my friends, we must finally tackle the very grave subject of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) as it relates to your mortgage options.  If you're shopping for a home loan I'm going to distill the entire 600-page bill down to a single concept.  Here goes:
Dodd-Frank prevents the bad players in the mortgage industry from putting uneducated borrowers into higher priced loans. It does so by preventing the good players from putting informed clients into lower priced loans.
You see, Dodd-Frank contains an anti-steering measure that strives to prevent predatory lending.  Agreed --- this is a very good thing.  But the mechanism by which it achieves this goal forces ALL lenders to set pricing before they even take an application.  So, by the time a customer walks onto the proverbial "showroom floor," the price of the car has already been set.
  • Lil' ole unsuspecting Ursula?  Car price:  $30,000.
  • Savvy Sally the super shopper? $30,000.
Some may think, "Well, that's good.  Nobody gets burned."  But be careful if you find yourself uttering such a sentiment.  Remember that nothing in this bill mandates that vendors make anything less expensive.  What if YOU could have negotiated that car down to $25,000?  How do you feel now?  Stepping outside of ourselves, what are the implications if you're running that dealership?
And this is my point.  Our lawmakers have chosen to view us, our industry and our clients as incapable of exercising the substantial personal responsibility required for consummating a home finance transaction.  So they have regulated it down to the lowest common denominator.  That denominator happens to be a real number, and it's one over which you'll have far less (or zero) control once Dodd-Frank is fully implemented in January, 2014.
As an fair and ethical lender all along I am working to position myself to offer the best pricing possible to the consumer yet still run a profitable and responsible business model.  Dodd-Frank makes this harder to do and I regret that we have lost our ability to go to bat for our clients where necessary, to make deals happen by cutting margin and to exercising the same benefits bestowed by a western, free market economy on just about every other industry in the United States.
Now that you know that your next mortgage rate has already been negotiated between your lender and Dodd-Frank, what do you think about it?


Robert J. Spinosa

Home Loan Professional
BRE: 01297944 NMLS: 22343

1058 Redwood Highway
Mill Valley, CA 94941

877.270.5959 Toll Free
415.367.5959 Cellular
415.366.1590 eFax

Rob Spinosa



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Fred Griffin, on leave of absence from ActiveRain
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

Good morning, Rob.

     This is far worse than, "I'm from the Government and I'm here to help".   This the Government deciding for you...  the Government is mandating what you will pay, and leaving you with no recourse.

Oct 22, 2013 11:10 PM #1
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

I think that the Nanny state is alive and well and achieving their goal of the eventual and total destruction of a market based housing industry, the driving force of what was a successful driving force of the U.S. economy since the 1950s.

Once the housing industry is gone, so will be the U.S. economy.

That's what I think.

Oct 22, 2013 11:52 PM #2
Rob Spinosa
Guaranteed Rate, Marin County, CA - San Anselmo, CA
Vice President of Mortgage Lending, Marin County

Fred --- you are correct.  We are essentially being told what benefits the consumer, even though the consumer is getting no say.

Lenn --- this is the bigger issue and the one that causes me the most consternation.  I appreciate that government involvement in the housing market is inevitable at this point.  We benefit from some of that intervention.  But where that intervention is mismanaged or contradictory, ultimately the end user suffers.  I believe Dodd-Frank will have exactly this effect. 

Oct 23, 2013 03:24 AM #3
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Rob:  What is seemingly done in the best interest of Buyers/Borrowers has often come back to haunt them in some other manner.  You provide one great example of this fact and truth.  I understand the intent ... it's the implementation that stinks.  We need to raise the bar and expectations of fairness, but do so where it doesn't end-up harming the client or the industry as a whole ...

As always, Rob ... great topic and info ...


Oct 23, 2013 07:48 AM #4
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Rob Spinosa

Vice President of Mortgage Lending, Marin County
Can I Get a Jumbo Loan with 10% Down?
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