Roy Kelley Sells Maryland Homes

I originated mortgages full time for 5 years in the early 2000s. I worked for both mortgage brokers, who place loans with 3rd party lenders, and, as they are termed in New York, mortgage bankers, who are direct lenders. Up until recently, it was hard for a guy off the street to distinguish between the two- the mortgage application verbiage used and process, to the borrower, was pretty much the same. Even as a loan officer, I saw enormous parallels: the qualifying software was the same, and the rates and pay structure were similar. We either earned money on the front end paid directly by the borrower, often referred to as "points," or were paid on the back end by the lender in the form of a Yield Spread Premium (YSP) for brokers or a Service Release Premium (SRP) for bankers. The nomenclature differed, but the net effect was the same: the higher the interest rate, the higher the commission (premium). 

When the Subprime Meltdown hit in 2007 and the Financial Crisis hit in 2008, mortgage brokers carried the PR chum bucket for bad loans. Even though Ameriquest, Countrywide and dozens of other major players who were direct lenders failed, it was mortgage brokers, and their yield spread premiums that were often the culprit in both the cyber world and polite company. There were arguments over the true purpose of the YSP. 

The banking industry and major media, in their best mad as hell voices, lobbied hard for YSP to be outlawed, and this past week, they succeeded. Yield Spread Premiums are now against the law. 

From the Fed: 

Today, lenders commonly pay loan originators more compensation if the borrower accepts an interest rate higher than the rate required by the lender (commonly referred to as a "yield spread premium"). Under the final rule, however, a loan originator may not receive compensation that is based on the interest rate or other loan terms. This will prevent loan originators from increasing their own compensation by raising the consumers' loan costs, such as by increasing the interest rate or points. Loan originators can continue to receive compensation that is based on a percentage of the loan amount, which is a common practice.

As with many governmental "solutions," this is outwardly politically expedient but will only hurt the public in the end. Why? Because the playing field is now completely tilted in the favor of large lenders, who keep their version of YSP. Smaller lending entities who previously dealt with brokers will be elbowed out of market share, and mortgage brokers now play by rules so severely tilted against them that they will go out of business. The baby has been thrown out with the bathwater, because brokerages, for all their flaws, were serving a need the bigger banks would often not. 

The Service Release Premium, the banker's equivalent to the Yield Spread Premium, is still legal. Direct lenders get to play by their own rules now. Whether you agree with the YSP or not, banks still have the back end option with SRP. Brokers, who often had the capacity to place a loan with literally dozens of lenders, do not. Whatever abuse there was with YSP is still available to lenders in the form of SRP. The lobbyists saw to that. It wasn't enough that YSP was required to be disclosed on the HUD-1 while the bankers SRP was not; they had to kill it, and cut the jugular of brokers. Who needs competition? 

Here's how it plays out for the borrowers in 2011: If you have good credit and are a W-2 employee, you can call your own shots the same way it has always been. But if you are self employed, have less than great credit, or need a niche product in our diverse society, you'll have no mortgage broker to find that specialty loan. Instead, you'll have your choice between a large, monolithic lender's single portfolio and a small community bank, both of whom will scoop the cream off the top and throw the rest back, with the exception of their Community Reinvestment Act requirements. There will be no mortgage broker to find your niche product because they won't be able to operate profitably. 

Banks already adjusted to the stupid things they were doing 5 years ago. Underwriting a loan now is as hard as it ever was prior to the Federal Housing Administration's genesis in the 1930s. We are rapidly heading toward a world where large big box lenders will be like huge telecoms, with consumers choosing either their loan portfolio or renting. Smaller community banks will be there for well credentialed people, and ironically, the folks who screamed about killing those evil brokers who were opening doors the big banks wouldn't open, will lament their extinction. Who loses? You. Big banks just did an end around past their most egregious offenses and the government played Washington General defense for us. 

Happy? 

My prior posts on Yield Spread Premium

• We Are Westchester County, NY Real Estate. Reach Phil at (914) 723-8900.
• J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service. 
• I am one of New York's premier short sale REALTORS. 
• J. Philip Serves Briarcliff Manor, Ossining, Croton, the River Towns, Westchester County, and the bedroom counties of New York City.
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It seems like my agent is dancing around my questions. Why is this?

Schools – It may sound vague when an agent talks about schools but Buyer and Listing

agents can not “steer” a client to or from a school.

Crime – I hear it all the time, how is the crime in this area. Again an agent will be vague and refer you to a website or the police dept.

Race and Religion – Who lives in this neighborhood. This is a biggie. Think about this for a minute, agents can not give you a cross reference of nationalities or religion in an area. We can not even tell you if there are a lot of kids in a neighborhood. We will say something like “well, when we drive around, let’s see if there are play-sets and bicycles”.

Sex-offenders/Megan’s Law – We actually write this one into our contracts, giving you a place to look for this information, but as an agent, we can not do this for you.

This is why I have links to pertinent information on my website at Charlottesville Virginia Real Estate

Best regards

Charles McDonald

Charles McDonald

Associate BROKER at RE/MAX Assured Properties, Licensed to sell Real Estate in Virginia

(main) 434-515-1585     (cell) 434-981-1585     (fax) 866-527-9526 

Brought to you by that guy who sells Charlottesville VA Real Estate

 
 

  
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            of the mind remain dormant.

                   There is a fuel in us which needs to be

                          ignited with sparks.

AUTHOR:  Johann Gottfried Von Herder

                                                       Make it a great day!

 

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Toula N. Rosebrock (of Diane Turton, Realtors) - Broker / Sales Associate - Specializing in all of Ocean County - Lacey Township Real Estate, Forked River / Lanoka Harbor

Unique Name ... Unique Agent ... Unique Service!

Websites: www.Toula.org and www.ToulaRosebrock.com

Waterfront Properties, Single Family Homes, Multi Family Homes, Condos, Townhomes, Adult Communities, Vacant Land, Commercial Properties, 1031 Exchanges

 

 When selling your home, the goal is to sell it quickly for the highest price while investing as little as possible in renovations. With a limited budget and a little effort, you can greatly increase your home's appeal by focusing on what prospective buyers can see on their first visit. The experts at BuyOwner.com offer the following recommendations for preparing a house for sale and staging it for showings.

Tip #1: Refresh the exterior
First impressions count when it comes to selling a home. Most buyers won’t even leave their car if they don’t find the exterior appealing. The best ways to improve your home’s exterior include:
-Repairing and/or replacing trims, shutters, gutters, shingles, mailboxes, window screens, walkways and the driveway.
-Painting siding, trim and shutters and lamp and mailbox posts.
-Pressure washing vinyl siding, roofs, walkways and the driveway.
-Washing windows.

Tip #2: Spruce up the lawn and landscape
Home buyers associate the condition of your lawn and landscaping with the condition of your home’s interior. By improving the outside, you affect buyers’ impression of the entire property. The best ways to enhance the yard include:
-Mowing and edging the lawn.
-Seeding, fertilizing and weeding the lawn.
-Keeping up with regular lawn maintenance by frequent watering.
-Trimming and/or removing overgrown trees, shrubs and hedges.
-Weeding and mulching plant beds.
-Planting colorful seasonal flowers in existing plant beds.
-Removing trash, especially along fences and underneath hedges.
-Sweeping and weeding the street curb along your property.

Tip #3: Create an inviting entrance
The front door to your home should invite buyers to enter. The best ways to improve your entry include:
-Painting the front door in a glossy, cheerful color that complements the exterior.
-Cleaning, polishing and/or replacing the door knocker, locks and handles.
-Repairing and/or replacing the screen door, the doorbell, porch lights and house numbers.
-Placing a new welcome mat and a group of seasonal potted plants and flowers by the entry.

Tip #4: Reduce clutter and furniture
A buyer cannot envision living in your home without seeing it. A home filled with clutter or even too much furniture distracts buyers from seeing how they can utilize the space your home offers. If you have limited storage space, you may want to consider renting a temporary storage unit to place items you wish to keep. The best ways to declutter your home include:
-Holding a garage sale to prepare for your move, getting rid of unnecessary items.
-Removing clutter such as books, magazines, toys, tools, supplies and unused items from counter tops, open shelves, storage closets, the garage and basements.
-Storing out-of-season clothing and shoes out of sight to make bedroom closets seem roomier.
-Removing any visibly damaged furniture.
-Organizing bookshelves, closets, cabinets and pantries. Buyers will inspect everything.
-Putting away your personal photographs, unless they showcase the home. Let buyers see themselves in your home.
-De-personalize rooms as much as you can.

Tip #5: Clean, clean, clean
The cleanliness of your home also influences a buyer's perception of its condition. The appearance of the kitchen and bathrooms will play a considerable role in a buyer's decision process, so pay particular attention to these areas. The best ways to improve these areas include:
-Cleaning windows, fixtures, hardware, ceiling fans, vent covers and appliances.
-Cleaning carpets, area rugs and draperies.
-Cleaning inside the refrigerator, the stove and all cabinets.
-Removing stains from carpets, floors, counters, sinks, baths, tile, walls and grout.
-Eliminating house odors, especially if you have pets.
-Considering air fresheners or potpourri.

Tip #6: Make minor repairs
The small stuff does count, especially with first-time home buyers. Without dismissing the importance of repairing major items such as a leaky roof or plumbing, you do not need to spend money on replacing these items. Instead, focus on the minor repairs that will make your home visually appealing. The best ways to improve your home include:
-Repairing ceilings and wall cracks.
-Repairing faucets, banisters, handrails, cabinets, drawers, doors, floors and tile.
-Caulking and grouting tubs, showers, sinks and tile.
-Adding fresh paint to ceilings, walls, trim, doors and cabinets.
-Tightening door handles, drawer pulls, light switches and electrical plates.
-Lubricating door hinges and locks.

Tip #7: Showcase the kitchen
The heart of any home is the kitchen. If you are going to spend any money on renovations, this is the one area where you will see the greatest return. Even with a modest budget, focusing on a few key areas can make a great difference in getting the asking price for your property. The best ways to showcase the kitchen include:
-Replacing cabinet doors and hardware.
-Installing under-cabinet lighting.
-Replacing light fixtures.
-Replacing outdated shelving with pantry and cabinet organizers to maximize space.
-Baking cookies or cupcakes for a showing, to create a homey smell.

Tip #8: Stage furniture
Furniture placement can enhance the space of your home while giving buyers an idea of how to best utilize the space with their own belongings. Take some time to rethink how different areas in your house could be used. Some ideas to think about include:
-Moving couches and chairs away from walls in your sitting and family rooms to create cozy conversational groups.
-Creating a reading corner in the master bedroom.
-Clearing an empty room to set up a reading space.
-Turning an awkward space into a home office.
-Setting the dining room table with your best china.
-Set wine glasses in front of the fireplace or next to a Jacuzzi tub.

Tip #9: Light up the house
Create a sense of openness and cheerfulness in your home through its lighting. To improve the lighting try:
-Opening shades and drapes to let the sunshine warm and brighten rooms.
-Installing brighter light bulbs in rooms that tend to be dark.
-Adding additional lamps for ambient lighting.
-Turning on all the lights for a showing.

Tip #10: Add fresh touches
You can easily add color and style to your home by adding fresh touches throughout. Some ideas to consider include:
-Placing fresh floral arrangements in the entry and master bedroom.
-Placing bowls of bright-colored fruit in the family room and the kitchen.
-Filling an empty corner with a potted leafy plant.
-Setting new hand soap in the bathrooms.
-Displaying fresh towels near sinks.

By Paige Tepping