Clarification about your statement of what I do...
1. We are not brokers.
2. Yes we make our money on the yield spread
3. Because we fund our own loans, our rates are competitive with or LOWER than those offered by brokers who charge the fees and points. Thus there is
no "Cost Shifting" from points/fees to higher rate as you stated. They get the low rate you would offer them without the points you would have to
4. When you charge those points/fees you INCREASE their debt by "rolling them into" the loan amount, which is hardly a benefit to a borrower in
My guys do HUGE numbers of these loans nationwide. That is how we are able to do this. Make a little on TONS of units and you have a solid business
Typically brokers are limited to their "territory" and pay their loan officers on commission which creates a conflict between doing what is right
for the borrower and putting food on your table.
I pay my loan officers a base salary and a small bonus for attaining certain levels of production (funded loans per month).
This division is actually "supported", when necessary, by my wholesale and classic retail operations that make the proverbial "killing" on income
My "moral" stance was based on the fact that I could cease this program altogether or I could charge the points and fees and pocket the money. I
feel like this is a way to give back to the society that has given so much to me.
[Edited on 8-23-2003 by Springer]