I recently received another message from an anonymous sender that we call "The Loan A-Ranger." See what the implimentation of the loan originator compensation has done to his pricing. Please e-mail your thoughts to
[email protected] so that I can share your reactions with our audience. Your identity will be fully protected. Here are some thoughts from The Loan A-Ranger:
The day we all have dreaded had arrived. The Fed had won the fight. I waited nervously until our rates came out this morning to see how the change affected us. A client came in and I decided to price his loan as test.
FHA refi
$205k loan amount
720 FICO
95.44% LTV
Owner-occupied
I fired up ole Optimal Blue and pushed the enter button and waited for what seemed like an eternity for our "new" pricing to show up ... 4.75% paying back 3/4 and I thought well that's not so bad since I'm making a point now with the new pay plan. :)
An email came in from a friend in the business after my client left so I replied with "hey man, what can you do today on the same scenario?" He said we are at 4.75% paying back 2.25, what are you at?" My heart sank as I told him sheepishly, "you don't want to know". I immediately got on the phone to several other friends I have know over my 28 years in the business and found that some where the same as we were. Some were 1 point worse than we were and some were 2 3/4 better than we were! Normally all of these guys are within in a quarter of us on any given day. Got on the phone to our secondary marketing department and sent them their rate sheets killing us. They said "Wow, maybe we need to re-look at our model." YA THINK?
I realize that the Fed rule is a bit confusing, but come on .. with all the attorneys and CPA's we all have to figure this out, you'd think it would not be this difficult to price a loan and be competitive.
