I realized a while back with the mortgage shift and reshaping, that I need to be a part of the cleanup.

Thank you so much for the information on what to charge, so I can always continue to educate my clients and future clients, as well.

Sincerely,

Keith McClain

Our community of brokers and bankers are required to charge a flat fee for service disclosed near the inception of the relationship, between $2000-$5000 (single line broker compensation item) per deal. 3rd party costs not included.
They don’t charge points, as I like to say, the loan amount has very little to do with the cost or time associated involved with closing that loan. A $100k loan can be harder to close than a $500k loan, so we steer clear of the illogical % base loan cost commission model.
Income doc requirement does, i.e. we charge less for reduced doc loans because they require less work.

Our affiliates tier out their pricing based on a few other factors as well. They make less per loan than your average broker, but close more loans in less time, and actually make more money…asing the leading question:
Would you rather make $10,000 over 60 days or $7500 over 30 days? A split commission system doesn’t work under these conditions, so we use an alternative comp model.

We layout the direct wholesale rate sheets displaying absolute par rates and allow the client to choose how they want their fees wrapped up…selling true transparency instead of rates and fees…

Hope this answered your Q
JeffX

I appreciate that, and I’ll look forward to hearing back.

Christian

I applaud your efforts and get a lot of good information from your site, but I do have a question. In your opinion, what should a loan officer make per loan?

In a perfect world, we’d all get consistent business and price based on volume motives, not roller coaster month motives.

Regarding your LO’s, what’s their average split/YSP? I try to consistently price loans at 1-1.5% YSP and feel like I’m in the more competitive end of the pool.

Just interested.

Thanks again, and keep up the good work.

Christian

11/04/2006 by Jeff Corbett

But like I said before… Jeff C. makes some good points. But standardizing a flat fee, just won’t work on an overall scale. But he did point out some other issues that I do agree about. One is, some brokers or lenders just making too much off a client when they could give some of it back. That I do agree with…

11/04/2006 by Jeff Belonger

Jeff-X…your figures suggest a $3,000 brokerage fee on a $410,000 loan. Any brokerage worth it’s salt would be out of business with those margins (and still provide a full-service offering).

The brokerage fee for that loan (incuding a processing fee) would be somewhere in the $4,000-$5000 range….and the answer is Yes…I have tried it at the lower margins and you just can’t keep quality, licensed emplyoees for those margins and stay in business. You can mix it up anyway you want but a 1-1.25% margin on A paper loans is an absolute necessity to pay the lights, copiers, and employees (if you’re in it for the long haul)

Otherwise, great posting.

11/04/2006 by Brian Brady

As far as a banker having to disclose YSP…in a marketplace of forced transparency, what is their sales pitch for an unexplained higher APR or when a consumer asks them why they didnt disclose YSP? ‘I didnt have to tell you?’

AUE’s have caused quite an attrition, a ‘fat cutting’, of human UW’s and other previously labor intensive jobs. I’m not speaking in absolutes…some piece of tech isn’t going to eliminate, rather it will regulate and streamline. DU was an important step forward, but far from a transparent solution,; an ‘insider industry’ example of the type of a tool that can radically change how we do business.

I understand I speak too cryptically about all of ‘this’, as if much of ‘this’ has already permeated the marketplace, which it hasn’t…not by a long stretch. So I lace my posts with thought provoking fact…hoping others begin to see what is coming.

Without actually making the damning allegations and proposing the comprehensive solution, I appear as an idealist, waffling around clouds 9, 10, and 11…high on my own ether..hahaha :))

Over the next 12-18 months, these topics will become a flash point for the industry. There is a perfect storm coming together…

I appreciate your opinion and time Jeff, you and others in this community help me better understand the collective conscious of what is still good in the mortgage industry.

11/04/2006 by Jeff Corbett