I understand your perspective thinking that I am taking shots at you because the only two times I have posted here are the two times that I have disagreed with you. The many times I’ve nodded in agreement, I’ve not chimed in with support.

I appreciate your mission with your site and believe that consumers should have all the information available to make informed decisions. I also believe that our industry is “broken” and that there are few “easy” or “perfect” solutions for fixing it.

I will send you a separate email with contact information and we can discuss a format where a productive debate can help the blog and your readers.

Obviously you have many years of additional experience than I do, and you disagree with my views on many of the items I post about. I know there is never just one “right answer” and I’d like to share knowledge about the industry from all sources with the readers here.

So if you’d like to do so I extend the invitation to write a post here. If you decline I completely understand but hope that as professionals we can disagree in a manner that is congruent with the way in which we choose to conduct our business.

Best,
Morgan

Why is it such a sore subject for you? Are you “one of the good LO’s” that is tired of being treated poorly for the acts of the rest of the industry? If you are then you shouldn’t have a problem with consumers protecting their best interest. And you shouldn’t have a problem structuring your fees in a manner that is inline with your actual charges and compensation. Fees that are pumped up for hidden profit centers are a bad deal for consumers – bottom line.

What I’ve learned in the 3 years in the industry is that most of this industry is filled with people who rip consumers off – it didn’t take that long to learn either. You can side with the poor loan officers who need to pay the 745i payment and I’ll side with the guy getting hosed for $10K on their $300K refinance.

Also, do you take the same sarcastic, derogatory tone with everyone that has a different opinion than you that you do in your comments on this blog?

A quick aside – are you the Mr. Lewis that has been a guest writer on the OC Register mortgage blog?

“Loan officers have been doing it for years”
“Home owners have been screwed for years – they deserve” (to do some screwing themselves).

Wonderful red herrings and rationalizations. Your argument is akin to picking up some day laborers and telling them you have some yardwork you need done. They say great, we’ll do it for $100. You agree and the work is completed. Now you tell them, “Now I only think this is worth $50 so here is your $50, take it or leave it. This is how I ‘negotiate’.”

Obviously, you’re right Morgan, nothing unethical about that.

Loans are negotiated upfront before the work starts so everyone can decide what is fair and proceed in their won best interests.

As usual, you mistate the facts in saying these are “pure profit” fees. I forgot that notaries are public charities, processors work for free and appraisers don’t expect to get paid.

Even if they were “pure profit” the borrower should have objected upfront or taken their business to a nice lender that doesn’t expect compensation for their efforts. You’ve learned a lot in your 3 years in the business, keep up the good work.

Loan officers have been doing it for years – using different leverage points to make you accept their deal. Same for the auto industry – why do you think they have you go to “finance” once you’ve negotiated with the sales person?

I don’t think this is unethical, using time in a negotiation is a common practice. Why do union strike agreements get resolved “at the last hour”? Why do contracts get done “at the wire”? Because time is a leverage point in the negotiation.

I am simply highlighting a tactic that far too many homeowners have used against them and don’t use for themselves. I don’t think that it registers as unethical. Otherwise your argument would make all bargaining and negotiating tactics as unethical.

Further most of the fees that I discuss are pure profit fees for the entities involved – they’re bogus. And they usually don’t impact the loan originator as they are paid on the commission part; unless the loan originator is padding other fees to increase their paycheck. If they are doing that then they deserve to have these tactics used against them.

Home owners have been screwed for years – they deserve some ammunition of their own.

If you have problems with fees, the time of disclosure is when you negotiate. The simple way to understand this is to put the shoe on the other foot. Assume you go to sign loan documents for your home purchase and find that your broker has added $1125 in fees but waited until closing to let you know “for maximum effect.” You would say this is highly unethical if your lender did it and it’s still highly unethical if you do it.

By all means, folks should try to negotiate the best deal possible. They should do so by selecting a reputable lender, getting upfront disclosures and negotiating at that time. That way the lender can decide how much they are willing to work for instead of putting in 30 days of work before being told the borrower doesn’t intend to pay the terms agreed upon.