I have never seen an industry where a subset of participants were so wracked with guilt about earning income from their profession.
Lying to clients, pushing them aggressively to unsuitable loans they don't understand, etc - these are obviously not good practices.
However, this automatic negative response to anyone who prices a loan making more than minimum wage is silly. First, business price products to make money - the market and competition dictate what that can be. How about a thread about how a department store should be doubled over with guilt because they suckered people into paying $500 for cashmere sweaters that end up in the bargain bin in January for $49?
How about the fact that not all deals and clients are the same? How about just maybe a borrower pays an extra point, which costs them less a month than they spend at starbucks because they feel the loan officers is doing a good job for them, helps them find the right product, deals with problems, keep them advised, and maybe just maybe gets a loan through when someone less attentive wouldn't.
True about the guilt. I have even felt it personally, but when I realize that I am offering people competitive rates and fees, I feel better. I beat the banks with rates and fees. I am making a lot of money right now, but I am closing a lot of loans. I didn't get into this industry for charity work. I have many of my friends that are making between 250-500K per year in other industries. Do they feel guilty? I don't think so.
I own a small mortgage broker shop in Minnesota. Have five employees and we are doing really well. I was much larger in years past, but now I originate most of the loans in the office and have few employees.
We have 15 loans scheduled to close on Monday. 7 of those are mine personally. Making great money and at the same time offering people great deals so I really have no reason to feel guilty, do I?
If it comes to a point where I can't make a great living anymore, it will be time for me to move on to an industry where I can.
mahalo guy Wrecking crew
Joined: 28 Jun 2008
Posts: 1943
Location: Honolulu
I have never seen an industry where a subset of participants were so wracked with guilt about earning income from their profession.
Lying to clients, pushing them aggressively to unsuitable loans they don't understand, etc - these are obviously not good practices.
However, this automatic negative response to anyone who prices a loan making more than minimum wage is silly. First, business price products to make money - the market and competition dictate what that can be. How about a thread about how a department store should be doubled over with guilt because they suckered people into paying $500 for cashmere sweaters that end up in the bargain bin in January for $49?
How about the fact that not all deals and clients are the same? How about just maybe a borrower pays an extra point, which costs them less a month than they spend at starbucks because they feel the loan officers is doing a good job for them, helps them find the right product, deals with problems, keep them advised, and maybe just maybe gets a loan through when someone less attentive wouldn't.
Sure, I actually agee with you. But in my experience, when someone brags online about making 3 points per deal, your arguement goes off track.
But then again, I got a lot of business from pointing these guys out to my new clients. So in a way, they made me money.
I probably average about 1.5 points per deal. I don't have any problem with the people that make 3 points per deal though, more power to them. The way the banks price their deals, they are making 3 points per deal.
My business model is more on volume than making a lot per transaction. If I thought I could do high volume and charge 3 points per deal, I wouldn't feel bad about it though.
Let the customers dictate what they feel the value is. With more and more people getting out of this industry, the profit margins will move up.
syntheticheroin Nitroglycerin
Joined: 05 Mar 2007
Posts: 544
Location: Lake of the Ozarks
Some of you amaze me. We offer a service. If you are the best, you should get paid like the best.
I offer a competitive rate on every loan I do. I disclose my costs and rate up front. My rate may be an .125% more than the next guy but I close every loan on time and as described. I know my business, my product and my competition inside and out. I show my clients my service is the second to none. I only work with realtors who do their job so I can do mine. None of my realtors question my rate or my costs. They know their clients are well taken care of. I have had very few complaints but my realtors know to call me first before passing judgement.
I started working with the top realtor in our area two years ago. She did $40 mil in 2006, 34 mil in 07, 27 mil in 08 and 31 mil so far in 09. I jumped through hoops for her the first year. I teamed up with another guy in my office who does much less volume but is close friends with the realtor. She talks to him on virtually every deal. She calls him at night and on weekends. I put it together and he follows it through processing and underwriting. We split everything 50/50. I have made between $28-45,000 in income off this one realtor a year. As other realtors found out that I was working with her, they started to want to work with me. I now work with a good number of the top 15 in our area.
I lose a loan here and there because someone is more concerned about saving $100 on closing costs. That is fine. Those folks are not looking for a service. They are looking for an order taker. Most of these people treat me with no respect. I had a client early this year that I closed a purchase loan for at 4.875% on a fixed 15 year. 89 days later he refied with a local broker for a rate at 4.625%. I was hit with recapture on the loan. A month later he called me and said if the rates hit below 4.5% to call him. I told him to stick it up his a$$.
Just because you are the lowest rate does not mean you are taking care of the client. You have to be willing to walk away from a deal.
Not sure where you are sending your deals, but I'm a sofla guy as well, and averaging around 3 pts on each fha deal. I think sales has a lot to do with it too (not saying this is you) but typically the guys who charge very little, suck, so because of that they feel that they cant charge much.
THIS CAN'T BE WHY MIAMI PROPERTY IS GOING FOR .50 ON THE DOLLAR NOW, IS IT??????????
SAME FHA LOAN BUT WAY HIGHER COSTS FOR THE CUSTOMER, DON'TCHAWORRY, THE GOVERNMENT IS GOING TO FIX THAT...................
AND AHEM, IT WON'T BE FOR THE HIGHER COST GUY
IN FACT WHEN THEY ARE PULLING PEOPLE THRU THE COURTS IN THE NEXT COUPLE OF YEARS
(NEVER FORGET THAT THE MORTGAGE INDUSTRY IS GOING TO BE THE NEXT "JOB'S PROGRAM" FOR THE TRIAL LAWYERS- I MEAN THERE ARE VICTIMS STANDING ON EVERY CORNER )
THEY WILL HAVE YOU AND YOUR CLOSING COST SHEET NEXT TO THE 0 POINT GUY AND BOY THE JURY WON'T BE TOOOO PROUD OF THOSE SALES SKILLS
AREN'T YOU PAYING ATTENTION TO THE GAME AT ALL???????????????
You are exactly right. Its totally my fault that YOUR Miami property lost value and is now worth half of what it was.
Quit crying over it. It was you who bought the home, not me. I'm in the same situation you are, and there is nothing that I can do about it. I have one rental that is worth 18% of what I paid for it. I'm the one that took the risk in purchasing it, thats the way the cookie crumbles. My primary home is worth 250k less than what I owe, and that is a total blower as well. Call up your mortgage holder and ask them for a workout. Thats what I did, at least if you are persistent enough, and talk to the right person on the other end they will help you and at least give you a reason to stay in the home, rather than to walk away, and rent the same house across the street for half of what your mortgage payment is..
Does it suck? Absolutely. There is nothing that can be done about it though.
Hey it's good to know I suck! What a relief, now it all makes sense to me. I don't attempt to sell 3 points because my whole business model is based on giving people a good deal so they come back to me. 3 points - again good for you, we don't try and do that - my deal on Friday? was able to sell 5.25% with 0 points - make a little over 2 (FHA - Franklin and the deal was small) 5.375 and I wouldn't have gotten the deal - I'm happy, even though I guess I suck. I'll live!
Hey man, didnt say it was you, or that you suck. Thats why I put in parentheses that I wasnt saying it was you. I dont know you at all.
Its just my personal opinion, that quite a few guys who charge nothing to do a loan either dont think they are very good at what they do, they arent very good at what they do, or feel that is the only way to get business is to be cheaper than the competition.
Again, I'm not saying this is you man, so if that was interpreted the wrong way, it wasnt a direct shot.
Hey if you are still in the business paying your bills and making it. YOU ARE KILLING IT!!!!!!!!!!!!!!!!!! It does not matter how much you make on each loan the fact that you are here and weathering the worst market ever pseaks volumes for all of us left. There is no shame in making a loan and earning less the fact is that while other people gave up and threw in the towel here we are and here is where we are going to be come Jan 2010, Safe Act, HVCC or whatever else they throw at us. We are survivors and that is the fact. The people trying to discourage us are the people either out of the business or trying to get us out to get a bigger piece of the pie.
Keep going, be honest, show value, and you will be around for many years to come.
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