Selling Fannie/Freddie has never been a high profit segment of the industry and frankly, your 2-2.5 point average puts you among the highest prices lending options available to the consumer. If you are truly concerned about providing your clients with ethical service as defined by you (cheap) then why do you screw them for 2.5 points on a cookie cutter deal they can get from their credit union for $500? Any order taker can deliver a conforming note! How does your client feel when they go to deposit their paycheck and the order-taking LO on staff makes them aware that they overpaid for a F/F note by 2 points? Just messing with you Floyd! I’m trying to point out the flaw in my interpretation of your defintion of eithical behavior!

Floyd, you and I do not ACTUALLY have different opinions. We both believe that excellent, ethical service deserves to be rewarded. You specilize in SELLING cookie cutter products to gullible people that like you enough not to shop you. I specialize in selling ‘exotic’ mortgages to clients too lazy to shop. I’m sure we both agree that carpet-bagger operations like Ameriquest deserved (and those that survive still) to be driven from the market. I simply encourage you to uphold a high price point; if the ‘good guys’ don’t, who will take the place of the professionals? $40,000 per year, order-taking idiots. If you doubt me, stop by a local bank/banker/broker and attempt to have a coherent coversation with an average LO. They are a 1/2 step above monkeys and can’t even read or explain a note. They spend their days accidentally ripping off people more ignorant than they.

There is no such thing as a ‘bad mortgage’ as all available products serve a useful purpose when used accordingly. There are however a teeming multitude of bad LOs.

And doing a billion in volume is different than earning a billion dollars. Your ‘touche’ missed its mark!

This can only help us out.

Jeff M.; For someone with such great claimed previous volume/experience I am stunned by your ignorance. Lending commitments are worthless without liquidity. Ask any Banker stuck holding worthless New Century or AHM paper about banking reality.

Scott H.; You are an idiot and an obvious amateur. Your bank will soon be out of business if you continue to fund anything but Fannie/Freddie. When your employer gets stuck with $10M in bad paper and has to fire sale it at 25% discount you will be looking for a job at a Broker. Buy back clauses are unenforceable if a lender is bankrupt.

Experienced Loan Officer; Relax friend, this storm will wash the trash into the gutter and the professionals can rebuild the Broker industry. Keep doing ethical business and enjoy the exodus of poseurs out of our industry.

Floyd; Sales drives industry. The Mortgage Industry provides products to consumers that need to be promoted and sold. It is LOs that underprice product that create opportunties for bad LOs to thrive. If every LO charged maximimum fees (like Realtors with their ’standard 6%’) the high level of income available would bring PROFESSIONAL sales people into the business and the competition would drive out the turds. Weak LOs that are willing to work cheap are typically the ‘rip-off’ artists. They are uneducated, lack finesse and have no knowledge of their product or how to sell it ethically. You are delusional if you think you are the ‘good guy’ because you work cheap. Go save the manatees.

If you use a small direct-lender. A broker who decided to get warehouse credit and become a correspondent seller you are playing with fire. One or two loans gone sideways on a warehouse line could freeze up funding mighty fast.

If you are working with a large, non-depository direct lender (like a NovaStar for example) then you have to be very careful that their whole operation doesn’t freeze up when a big pool or two can’t sell.

I believe your best bet in this market is to work with someone who is well educated about the changes in the market, is on top of the program changes, and can help navigate you through the rough seas to close on time with a fair rate and loan term.

Whether this person is a broker, a banker or works for a depository bank as a loan officer is really irrelevant. The important part is having someone who knows what is going on and knows how to handle your financing needs in this situation. Experience, professionalism, and expertise are all far more important than other factors. I’d take a .25 higher to rate just to work with someone who could successfully get me financing than a phone-jockey with 6 months experience promising the world.