gray4gray_IHB
New member
What does it mean when they say the mortgage broker's will not be able to sell the whole loan anymore to secondary marketing? I heard that on the radio yesterday.
New Mortgage Broker rules?
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NEW -> Contingent Buyer Assistance Program
OCCOBRA_IHB
New member
[quote author="gray4gray" date=1245548621]What does it mean when they say the mortgage broker's will not be able to sell the whole loan anymore to secondary marketing? I heard that on the radio yesterday.</blockquote>
Meaning most banks are not doing wholesale loans to brokers. And secondary money market does not want to buy loans originated by Brokers. Most wholesale lenders are going retail and are bumping the broker out of the picture as there was so much loan fraud and missrepresentation caused by the Brokers. Sure mortgage brokers will be there but they will only be doing hard money and investor type loans which is a very small part of the business.
Meaning most banks are not doing wholesale loans to brokers. And secondary money market does not want to buy loans originated by Brokers. Most wholesale lenders are going retail and are bumping the broker out of the picture as there was so much loan fraud and missrepresentation caused by the Brokers. Sure mortgage brokers will be there but they will only be doing hard money and investor type loans which is a very small part of the business.
sugarspunZ_IHB
New member
[quote author="OCCOBRA" date=1245567904][quote author="gray4gray" date=1245548621]What does it mean when they say the mortgage broker's will not be able to sell the whole loan anymore to secondary marketing? I heard that on the radio yesterday.</blockquote>
Meaning most banks are not doing wholesale loans to brokers. And secondary money market does not want to buy loans originated by Brokers. Most wholesale lenders are going retail and are bumping the broker out of the picture as there was so much loan fraud and missrepresentation caused by the Brokers. Sure mortgage brokers will be there but they will only be doing hard money and investor type loans which is a very small part of the business.</blockquote>
is there an actual statistic published showing that more fraud was caused by brokers? i was in the mortgage industry from 2002 until 2007 and i saw far FAR more fraud and misrepresentation by the large subprime direct lender like Quick Loan Fuinding, Home Loan Center, and Ameriquest.
i will buy that as a whole there were more brokers committing fraud than banks/direct lenders but by volume there is no way it is possible.
furthermore lets define fraud. do you/they mean taking advantage of a stated income loan (saying that Paco the gardener is an Environmental Engineer and makes $10,000 a month) or actual fraud (forging legal documents and or income documentation)?
Meaning most banks are not doing wholesale loans to brokers. And secondary money market does not want to buy loans originated by Brokers. Most wholesale lenders are going retail and are bumping the broker out of the picture as there was so much loan fraud and missrepresentation caused by the Brokers. Sure mortgage brokers will be there but they will only be doing hard money and investor type loans which is a very small part of the business.</blockquote>
is there an actual statistic published showing that more fraud was caused by brokers? i was in the mortgage industry from 2002 until 2007 and i saw far FAR more fraud and misrepresentation by the large subprime direct lender like Quick Loan Fuinding, Home Loan Center, and Ameriquest.
i will buy that as a whole there were more brokers committing fraud than banks/direct lenders but by volume there is no way it is possible.
furthermore lets define fraud. do you/they mean taking advantage of a stated income loan (saying that Paco the gardener is an Environmental Engineer and makes $10,000 a month) or actual fraud (forging legal documents and or income documentation)?
graphrix_IHB
New member
Quick Loan was a broker with warehouse lines and a bunch Wall streeters buying the bulk of loans directly. I can go more into detail if you want, but they were a broker and they were also one of the first to get their warehouse lines cut.
sugarspunZ_IHB
New member
[quote author="graphrix" date=1245845025]Quick Loan was a broker with warehouse lines and a bunch Wall streeters buying the bulk of loans directly. I can go more into detail if you want, but they were a broker and they were also one of the first to get their warehouse lines cut.</blockquote>
i know they started as a broker, but quickly became a direct lender. yeah they were very shady. i knew a few people who worked there.
broker or not i am willing to bet that over 90% of their loans were banked.
i still think the broker gets a bad rap.
i know they started as a broker, but quickly became a direct lender. yeah they were very shady. i knew a few people who worked there.
broker or not i am willing to bet that over 90% of their loans were banked.
i still think the broker gets a bad rap.
graphrix_IHB
New member
Okay... just to be anal retentive and to clarify what a direct lender is, and what a broker with a warehouse line is...
A broker like QLF has a warehouse line from Bear Stearns, then Bear Stearns buys their mortgages. Bear Stearns then throws in the QLF loans along with loans from Home Loan Center, Greenpoint, etc. into a MBS pool and sells it off to [strike]China[/strike] investors. QLF is the broker, because Bear Stearns never directly dealt with the borrowers.
If you could call Bear Stearns (I know, hard to do today, but say back in 05) and get a loan from them directly, then they would be a direct lender.
Also, you can find Bear Stearns MBS pools, but not QLF MBS pools. I can find MBS pools with QLF loans in them, and they are indeed performing like crap, but they don't have enough loans for a separate pool.
All QLF was, was a broker with a warehouse/credit line to fund mortgages, then sell them to the likes of Bear Stearns, ML, and New Century. Just like a broker, however the broker doesn't fund the loan, but the Bear Stearns/ML/NC does and they warehouse/credit line it until they have enough mortgages they can package and sell it off. Being able to fund a loan yourself does not make you a direct lender, unless you are packaging the loans up into a MBS pool yourself and selling it to investors directly. Selling a bunch of loans to ML when they package them into several pools, and they sell it to the investors means you are not a direct lender.
On side note, I agree, brokers do get a bad rep. But... my point, and why it is important to know the real difference between a broker and a direct lender, is that brokers like QLF give them a horrible rep, and their numbers skew the good brokers numbers due to sheer volume. Unfortunately, QLF spawned many other broker shops, like Optima Funding that started off as a broker, then got warehouse lines and called themselves a direct lender. And, there was a study done on the performance of broker loans/warehouse line loans, and it was indeed worse than direct lending.
I know Daniel Sadek, and several of the people that worked there, including the guys who started Optima Funding. If you, or someone you know worked for QLF between 03 and 05, it is highly possible I met you or who you know that worked there.
A broker like QLF has a warehouse line from Bear Stearns, then Bear Stearns buys their mortgages. Bear Stearns then throws in the QLF loans along with loans from Home Loan Center, Greenpoint, etc. into a MBS pool and sells it off to [strike]China[/strike] investors. QLF is the broker, because Bear Stearns never directly dealt with the borrowers.
If you could call Bear Stearns (I know, hard to do today, but say back in 05) and get a loan from them directly, then they would be a direct lender.
Also, you can find Bear Stearns MBS pools, but not QLF MBS pools. I can find MBS pools with QLF loans in them, and they are indeed performing like crap, but they don't have enough loans for a separate pool.
All QLF was, was a broker with a warehouse/credit line to fund mortgages, then sell them to the likes of Bear Stearns, ML, and New Century. Just like a broker, however the broker doesn't fund the loan, but the Bear Stearns/ML/NC does and they warehouse/credit line it until they have enough mortgages they can package and sell it off. Being able to fund a loan yourself does not make you a direct lender, unless you are packaging the loans up into a MBS pool yourself and selling it to investors directly. Selling a bunch of loans to ML when they package them into several pools, and they sell it to the investors means you are not a direct lender.
On side note, I agree, brokers do get a bad rep. But... my point, and why it is important to know the real difference between a broker and a direct lender, is that brokers like QLF give them a horrible rep, and their numbers skew the good brokers numbers due to sheer volume. Unfortunately, QLF spawned many other broker shops, like Optima Funding that started off as a broker, then got warehouse lines and called themselves a direct lender. And, there was a study done on the performance of broker loans/warehouse line loans, and it was indeed worse than direct lending.
I know Daniel Sadek, and several of the people that worked there, including the guys who started Optima Funding. If you, or someone you know worked for QLF between 03 and 05, it is highly possible I met you or who you know that worked there.
caycifish_IHB
New member
And I truly wish I had on video the scene last night where Graph had just posted the above message and tried to explain the concepts to me using a Napastyle catalog, 3 Axe body spray free samples and a water glass.
gray4gray_IHB
New member
So will it have any effect on an individual borrower that the mtg broker won't be able to sell the whole loan anymore?
Sunshine_IHB
New member
[quote author="caycifish" date=1245901104]And I truly wish I had on video the scene last night where Graph had just posted the above message and tried to explain the concepts to me using a Napastyle catalog, 3 Axe body spray <strong>free samples </strong>and a water glass.</blockquote>
Thank you for clarifying that those were free samples.
Thank you for clarifying that those were free samples.
caycifish_IHB
New member
[quote author="Sunshine" date=1245930310][quote author="caycifish" date=1245901104]And I truly wish I had on video the scene last night where Graph had just posted the above message and tried to explain the concepts to me using a Napastyle catalog, 3 Axe body spray <strong>free samples </strong>and a water glass.</blockquote>
Thank you for clarifying that those were free samples.</blockquote>
Planet Hollywood in Vegas is offering them in the guest rooms right now. The other ladies on the trip only wanted one for their SO, so Graph got the other 3. He's just a lucky guy!
They became "Cayci's loan at 5.75, Mike's loan at 5.62 and Scott's loan at 5.75."
Thank you for clarifying that those were free samples.
</blockquote>Planet Hollywood in Vegas is offering them in the guest rooms right now. The other ladies on the trip only wanted one for their SO, so Graph got the other 3. He's just a lucky guy!
They became "Cayci's loan at 5.75, Mike's loan at 5.62 and Scott's loan at 5.75."
usctrojanman29_IHB
New member
[quote author="caycifish" date=1245967473][quote author="Sunshine" date=1245930310][quote author="caycifish" date=1245901104]And I truly wish I had on video the scene last night where Graph had just posted the above message and tried to explain the concepts to me using a Napastyle catalog, 3 Axe body spray <strong>free samples </strong>and a water glass.</blockquote>
Thank you for clarifying that those were free samples.</blockquote>
Planet Hollywood in Vegas is offering them in the guest rooms right now. The other ladies on the trip only wanted one for their SO, so Graph got the other 3. He's just a lucky guy!
They became "Cayci's loan at 5.75, Mike's loan at 5.62 and Scott's loan at 5.75."</blockquote>
You guys should have gone down to the poker room at PH Casino to say HI to my dad because he deals poker there.
Thank you for clarifying that those were free samples.
</blockquote>Planet Hollywood in Vegas is offering them in the guest rooms right now. The other ladies on the trip only wanted one for their SO, so Graph got the other 3. He's just a lucky guy!
They became "Cayci's loan at 5.75, Mike's loan at 5.62 and Scott's loan at 5.75."</blockquote>
You guys should have gone down to the poker room at PH Casino to say HI to my dad because he deals poker there.