In my opinion, with the sole exception of slightly lower total escrow fees, there is not a single other advantage Retail Bank has over a Mortgage Broker/Banker for financing.
Regarding the subject of Retail Banks vs. Mortgage Banker/Brokers here's a short and quick GENERAL comparison BASED ON MY INDIVIDUAL EXPERIENCE between the two:
Retail Banks (Wells, BofA, Chase, etc.):
a) W2 employee Loan Officers NOT licensed by the State/Fed.
b) No Real Estate or Financial Training Required.
c) Access to Bankâ€™s single set of loan products.
d) When itâ€™s time to lock a rate you get their rate.
e) Very limited day-to-day info flow to Buyerâ€™s Agent.
a) W2 employee or Independent contractors Licensed by the State/Fed.
b) State/Federal continuing education and testing required.
c) Access to various Bank/Wholesale financing products and multiple versions of multiple loan products.
d) When itâ€™s time to lock a rate you get the dayâ€™s BEST rate between all funding sources.
e) Maximum info flow to Buyerâ€™s Agent based on relationships.
This last point (â€œeâ€) is always a key concern. Hereâ€™s why: There are 2 types of loan conditions that we need to stay on top of to meet contingency timelines of the purchase contract: 1) Prior-to-doc (PTD) conditions are those that must be satisfied before the lenderâ€™s underwriting department will generate and send loan docs for you to sign at escrow. 2) Prior-to-fund (PTF) conditions are those items that must be satisfied before the investor will â€œpush the buttonâ€ to send your new loan funds to escrow. To be proactive regarding #1 & #2, I ask for the lender-specific list of PTD/PTFs generated by the Underwriters and go over it to get ahead of any potential issues that may affect funding, which could place your good faith deposit at risk, and/or lead to the money spent on appraisal/credit report/property inspections to be wasted.
I asked my self why would I send a client to a big bank?
I would send my clients to a big banks to get pre approvals only for the purchase of foreclosures which sellers or asset managers require that a buyer be pre approved by one of their lenders. In doing so I ask my clients to get pre approved by the big 3 banks along with a few mortgage brokers. It is always an eye opener for the client to see how much big banks charge or in my opinion overcharge people. What I find interesting is, the big banks usually end up owning or servicing the loan in 3-4 months anyhow.
Harold Sharpe - Broker
So Cal Homes Realty
California Department of Real Estate Broker License # 01312992
Usually the "big banks" appraisals never come in and I can negociate a lower proce for my client. Other that that I never refer "big banks" to my clients.
Thank you so much for sharing that wonderful insight. That video was indeed riviting and well worth viewing. It reinforced anotner mean read I'm in the middle of studying almost verbatum: "The End of Wallstreet". It almost echos that snippit to the letter. We're going through some pretty scary times right now.
But, I'm still confused and with your obvious knowledge and expertise perhaps you can enlighten me somewhat. Why, if Obama already bailed the "Too Big To Fail" banks with almost a trillion dollars of yours, mine and our tax dollars do we owe anything on mortgages and who do we owe it to?
Am I missing something? If they got this money and paid it back then I guess we borrowers are still beholding to them. However, who's them? Some of these mortgages have been bundled up and passed along so many times how do we know that the lenders that are servicing our mortgages are applying the money to our mortgage?
Fortunately, or unfortunately as it may be I'm with Wells on both my 1st and 2nd. However, my 1st was bundled and sold off albeit Wells still sevices it and they still own my 2nd so I'm pretty confident that my loan is being handled properly. But can we say that about all the other lenders in this debacle?
Please review the two blog posts below and then buckle your seatbelt (and take a blood pressure pill) for the documentary link I have provided.
"Coming to a neighborhood near you: REO Shadow Inventory"
"Why the US Loan Modification Program is Ineffectual â€“ No, Really!"
In my opinion, an excellent must-watch documentary that best tells the story of the "mortgage meltdown" (starts with Iceland as the opening story and then concentrates on the US experience