'Each week it's harder'

Home buying and refinancing are good for mortgage brokers, who match borrowers with loans.

[Dave]

This is why I manage my own money. I would not trust anyone with the title "broker" "financial adviser" or "stock broker." They are all opportunists charging high fees or taking large commissions. Wheeler and Dealers who cause people to lose money. They all want to make large incomes, drive fancy cars, own big homes and live the good life .... off of someone elses money. Look at the scandals involving these type of businesses. And, when they cause investors and buyers to lose money, they (investors and buyers) cry to the Government and expect the taxpayers to bail them out. The present foreclosure problem is the result of greed brokers and lenders (including the Banks) and irresponsible "want rather than need" buyers. I make less income from my investments, etc. but one thing is for sure .... I can trust myself. And, don't need to ask the Government and taxpayers to cover my losses.

[Fred78]

Oh boo hoo. Look at the fees reported on the settlement sheets a lot of brokers received from mortgage companies and tell me you don't think they are crooks. I've seen crazy amounts. They may hunt for the best deal, but only for themselves.

[John]

I briefly worked for a mortgage broker, C&F Mortgage in Annapolis, and quickly got out of the business. They encouraged me to lie to my customers in order to get their business. They figured if you make promises to get the customer then the customer will be too far along in the process when you don't deliver to go back. I did not share this philosophy so I quit after a short time (and was honest with my customers all along.) But I do know first hand how shady some of these brokers were and how they can capitalize on homebuyers who trust them.

[Birdy]

I am still in the mortgage industry and work for a direct lender. There are still honest, hard working, mortgage professionals out there people.

[Sisyphus]

Mortgage brokers are the scum of the earth:

How are they supposed to get you a good deal, if the incentive is for them to put you in the worst possible one? They hide the information as long as they possibly can to avoid revealing their profit off the backside of the loan.

Just another middleman that artificially raises the costs to consumers, much like the speculators who trade oil as a commodity.

[Broke]

This article falls into the "What did they expect?" category. Brokers usually get paid a percentage of the mortgage amount, which is paid by the lender. So the greater the loan amount, the more the broker makes; likewise, the greater the number of loans, the more the broker makes.

So the broker has no incentive to ensure that the borrower can afford the loan, as this may reduce the loan amount or prevent the loan from going through altogether.

[Jerrard]

No sympathy for the real estate agents and the mortgage brokers. They bear most of the responsibility for the bloated housing costs. The agents inflated the values for a higher commission and the brokers wrote ever increasing loans. I had an agent tell me that the commission on the sale of a house paid for her addition. Well I hope that addition can make her mortgage payment for her...

[BDD]

Dave wrote:

This is why I manage my own money. I would not trust anyone with the title "broker" "financial adviser" or "stock broker." They are all opportunists charging high fees or taking large commissions. Wheeler and Dealers who cause people to lose money. They all want to make large incomes, drive fancy cars, own big homes and live the good life .... off of someone elses money. Look at the scandals involving these type of businesses. And, when they cause investors and buyers to lose money, they (investors and buyers) cry to the Government and expect the taxpayers to bail them out. The present foreclosure problem is the result of greed brokers and lenders (including the Banks) and irresponsible "want rather than need" buyers. I make less income from my investments, etc. but one thing is for sure .... I can trust myself. And, don't need to ask the Government and taxpayers to cover my losses.

I am not in the finance industry, but I think you are off base.

Good financial advisors don't charge up front fees to clients. My advisor gets paid by his broker dealer and costs me ZERO. And for the past 10 years he has beaten the S&P every year with the investments he has made for my family. There's always certain quarters when I occasionally lose some money, but I would still rather trust a professional who knows the markets better than I do. It's a matter of doing your research and finding the right advisor.

Don't characterize all of those in the profession as opportunists unless you actually know what you are talking about.

[employee]

To be fair...it's not the loan officers that are at fault for the fee's charged on broker loans, it the owners fault. The simple fact is, companies like Universal Trust Mortgage have such a lop-sided commission payout that the loan officers are forced to charge high fees on loans just to survive. And if total monthly fees/revenue (goals set by the owners) are not met...loan officers are subject to verbal and emotional abuse to instill the fear of losing their job. So, at no fault of the loan officer, they must charge high fees.

[economist]

Nice story, as it illustrates precisely the shakeout necessary to get back to normal. If only Washington and Annapolis would get out of the way for a few years and let these adjustments happen throughout the real estate industry. When the dust settles, then set up a new and reasonable regulatory system that shows that we learned something from all of the mistakes of the one that created all this in the first place.

[David]

People named "Sisyphus" are the scum of the earth. A ridiculous statement wouldn't you say? I guess I could group lawyers, teachers, nurses, grocery clerks, and policemen into that group too, huh?

An excellent mortgage broker is someone who searches multiple lenders to find the loan that best fits the needs of their cleints.

I agree, there are some out there that hide important information ... if caught, they should be dealt with harshly! Ask questions ... work with someone you trust or were referred to by a friend perhaps.

There are still honest mortgage brokers out there that will always do what is best for the client. I build my business by referrals, am a straight-shooter, don't like to surprise anyone, and don't like to be surprised. I believe that is the only way to do business ... be honest throughout the entire process ... even if it means losing a deal.

REMEMBER: The sun doesn't rise and set on any one deal.

[Frank]

brokers can get business from mortgage lead companies such as CoreLeads.com They understand the pinch lenders and brokers are going through and have a flat fee program for unlimited leads per month which avgs around 60 leads per month.

[Sisyphus]

David:

You must be the scum I'm referring to.

Lenders provide loans.
Lawyers provide counsel.
Teachers provide lessons.
Nurses provide care.
Grocery Clerks are being replaced by automated checkouts.
Policemen provide response to emergencies.

You provide nothing; save perhaps a markup in points or fee on the loan the lender is already offering anyway.

Why don't you stand outside a gas station and try reselling the gas, but for more money?

Your job is redundant; you're just another parasite on society.

[Spunk and Bubba]

Employee from Stevensville has hit the nail right on the head. Having been a former employee of Universal Trust Mortgage Corporation, I can personally attest that loan officers have to charge higher fees to homeowners. Loan officers working for mortgage company owners like Charles DiPino and David Auer are required to hit a certain number in total fee each month in order to maintain a job within the company. In addition, the commission structure set by Universal Trust Mortgage pays out such a low percentage to the loan officer that each loan officer has no choice but to charge as much as they can just to get a decent check every month and be able to survive in this industry. Obviously I no longer work for Universal Trust Mortgage (by choice NOT fired) and this is exactly the reason why. Loan officers that work for Charles DiPino and Dave Auer are required to work 9am-8pm Monday thru Thursday (Fridays they are fortunate enough to leave at 5pm) and are given no lunch breaks. They are required to eat lunch at your desk. Does that sound like a violation of OCEA? It certainly does to me. Then in there company meetings they will instill fear into the loan officers making them think that there is no other company out there where they could go and be successful. When I decided to leave I was personally told by Charles DiPino and Dave Auer to not try and recruit any of their loan officers to leave with me to go to whatever company I was going to work for or there would be legal ramifications to me and the company I was choosing to go work for. Basically, these mortgage broker companies/shops such as Universal Trust Mortgage are "sweat shops". If you have ever seen the movie Boiler Room then you will know exactly what I mean. In today's industry with lenders tightening their guidelines, home values depreciating, fewer homeowners being able to qualify for a mortgage, loan officers getting paid low percentage commissions by these types of owners, homeowners will continue to be overcharged. I believe mortgage brokers can still exist in this industry only if these greedy mortgage company owners such as Charles DiPino and Dave Auer begin to compensate their loan officers better. However, this will probably never happen because these types of owners will probably never sacrifice their expensive and lavish lifestyle that they have grown accustomed to just to better compensate the few loyal, honest, and hard working loan officers that continue to work for them.

[Been There]

The crisis in the real estate and mortgage industries is the fault of the brokers and lenders as well as the borrowers who signed for the loans. The brokers and lenders should have had the foresight to realize that the loans they were doing could easily result in disaster, and the borrowers who were taking out the loans should have been smart enough to think about more than just the cash or the interest rate they were getting. What the industry is experiencing now is everybody's fault.

That being said, brokers like Universal Trust are set up with an internal commission structure that forces the employees to charge as much as they can on every loan they work on, because it's the only way for them to make any money and to keep their jobs. The owners of companies like Universal Trust are not interested in the wellbeing of the borrowers they service, or their employees, they are only interested in themselves. They set standards for amounts of revenue that each employee must generate, and they incentivise the employees to bring in as much fee as they can by paying commissions on a sliding scale. The employee must bring in great amounts of revenue just to get a fair payout, and if they don't meet these standards month in and month out, that employee is subject to abuse and threats of unemployment. The only way for the employee to survive is to charge as much as they can on every deal. The owners of companies like Universal Trust set these guidelines and treat their employees as such in order to ensure that they make a bundle of money on the entire pool of loans that the company does, and they don't care about anything or anyone beyond that.

There are still good mortgage people out there who are willing and eager to do right by their clients. Nothing is free, and mortgages are a business, just like anything else, but that doesn't mean that a prospective borrower has to be taken advantage of by a selfish company owner who can't see past his own nose.

[Dopes]

Karma...

&

Good riddance...

[jbunniii]

"In past downturns in the mortgage market, lenders have been quick to close down their own branches, which tend to be more expensive, and shift more business to mortgage brokers."

-- Sure, but past downturns weren't CAUSED by the reckless behavior exemplified by the mortgage brokers. It sounds like the banks are slowly recognizing that it's a false economy to "outsource" critical tasks such as mortgage origination, and that practice certainly hasn't SAVED them any money at all the past few years. On the contrary, it has cost many of them literally billions of dollars.

[Interesting]

The housing market is cyclical- no one inflated values. Values of houses go up and they go down, similar to the stock market. Over any given 10 year period, houses appreciate an average 3-7%. This means some years they increase 40%, others years they go down 30%.

After working for several other mortgage companies before working for Universal Trust, I must disagree with several comments made about Universal Trust by the bitter, nasty person(s) in Stevensville. The owners don't force ANYONE to make more money from homeowner's for their own benefit. The fees charged to broker a loan at Universal Trust are some of the cheapest I have ever seen. And the owner's do everything possible to run a great business that helps homewoners get out of bad loans and they actually care about their employees. Maybe you just couldn't do the basic minimum in production to earn your seat with such a great company. I leave for lunch every day, by the way!!

[Joe]

Sisyphus, I think you are a little off here to say the least. Brokers are meant to find you the best deal. You are paying for their service, not their product. To set the record straight, it has been established in numerous tests by reputable companies that you get a better deal from brokers as opposed to lenders.

Regardless of who you deal with, nothing is free and you pay fees to lenders AND brokers. Lenders commonly charger higher rates while brokers charge higher fees.

The bottom line is that there are "bad apples" in all industries: lawyers, cops, doctors, teachers and EVEN priests.

Syph, I invite you to look up lenders like Countrywide, Chase and other huge lenders. They have loan officers working for them just as corruspt as any broker you will find.

Regarding this article, I think society as a whole needs to start owning up and stop pointing fingers. I know when I sign my name on anything, I like to be familiar with what I'm signing. Let's stop blaming the market, brokers/lenders, and the economy for mistakes we've made and start taking responsibilty for THEIR bad choices.

[Very Very Interesting]

Wow...what a very interesting comment from a so called "employee" of Universal Trust Mortgage. Those comments sound like someone is getting a bit defensive, which sounds odd coming from an "employee" if you know what I mean. Look, the bottom line is THE TRUTH HURTS. Also, I didn't read in any of the comments posted that those person(s) were fired because they were unable to produce the minimum amount of revenue to keep their seat. It sounded to me like that person or persons left Universal Trust Mortgage on their own terms because they had the self confidence and individuality to believe that they could be successful in the same industry but simply at another company. Perhaps a company that made them feel like an asset and not just a number who filled a "seat". Maybe, just maybe, they were tired being treated with no respect at all and never knew who was going to be reprimanded and yelled at. Life is too short to be unhappy at work and certainly too short to be treated like a “seat” filler.