My Way Lending

A lot of people ask me about my background and how and why I am in mortgages. Most people want to know why someone in the mortgage industry has a web site like Blown Mortgage. I guess its a little weird having a site that is primarily focused on the negative aspects of the industry in which I work. So with out further ado, for those of you that care about who is writing this blog please enjoy this autobiographical article that should shed some light on who I am and why I write Blown Mortgage.

Part 1
Part 2
Part 3

Part 4 - Today

PART 4

A Sea Change

After reaching some exceptional heights (we were named #4 in the nation Spring of 2006 in wholesale delivery for one of the largest mortgage companies in the world) we noticed a change.  It really began in the summer of 2006 and picked up speed in the fall.  Our consultants weren’t closing sales, complaints began to rise from our customers, and we experienced some of our first losing months as a company.  We had brought in some business consultants who hastily advised us to bring in management to run the ship so that we could focus on other things.  It turned out that by disconnecting we basically amputated the soul of the company from the operations.  People lost focus as to what New Day was all about.  They focused on themselves – with fewer loans closing they needed to maximize their take.  A horrible situation.

After a few months of watching this happen we decided enough was enough.  We went back to small.  We went back to basics.  We fired those that weren’t with the program; and took the responsibility back in to our own hands.  It was the best move we ever made.  Instead of being a mediocre medium-size enterprise we are now a small, sophisticated consulting group that wows customers.  I have finally reached the ideal.  We now deliver exactly what we promise.

As the industry shifted we refused to be caught up with loan buybacks and unsustainable business expenses and cut our losses quickly. And while we did experience some financial pain we are far better than the 150 companies gracing the Implode-O-Meter’s site (and countless brokers that are now doing something else).

Blown Mortgage

Blown Mortgage started after the New Century debacle.  It was started because I was tired of hearing from my employees all the stories of people being duped in to crappy mortgages.  I was tired of hearing about the bait-and-switches, the fraudulent CPA letters, the made-up W2’s, the forged rescission pages – everything.  I was tired of losing people to companies that chose lying over honest competition for a customer.  I would hear “they loved us and what we had to offer but went for a lower rate,” and knowing that the better rate was non-existent tried to determine the best way to eliminate that problem for our staff.

Blown Mortgage turned in to a way for me to highlight our skills as mortgage professionals with out being a sales platform.  Blown Mortgage took on a life of its own, and has become successful in the blogosphere partly for refreshing honest content (I think anyway) and more importantly being in the right place at the right time.  Will people care about mortgages in 4 years like they do today?  There may not be as much scrutiny or press coverage about them; but they will always be an important part of our economy and the American Dream of home ownership.  I hope that Blown Mortgage is there to continue to educate homeowners about the pitfalls of our industry; and how they can avoid getting stuck with a bad mortgage.  Of course, only time will tell.

I’ve written more about why Blown Mortgage is here in an interview I did, that you can read here for the rest of the Blown Mortgage back story.

Today

After 3 years we are in some respects back to where we started; in others we have come a very, very long way.  The mortgage industry is at a crucial stage – the uncertainty and fear in the markets is unprecedented.  The daily changes, lender failures and news make for an incredibly rocky ride.  Yet, we are extremely grateful for where we are today.  We are consultative experts who provide our clients insight and planning when dealing with their mortgages.  We are FHA approved and put people in to good loans based on sound common-sense underwriting.  We have matured as a company and as individuals.

I have learned that the ideal is there – that you can deliver on exactly what you promise; as long as you have the right people operating in the right framework.  We have that now and I am proud to own a mortgage company that is different – finally.  As the road gets tough we are confident that the money we invested in our licensing and FHA approval, along with our ability to truly deliver exceptional service will in turn serve us well.

Thank you for reading my story and for reading Blown Mortgage.  It truly is an honor to me.

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If you are in the process of taking out a new mortgage to purchase your home or refinance your existing mortgage, the fees you pay can make the difference between getting a great mortgage loan and paying too much. The fees on your Good Faith Estimate are often cryptic and many brokers leave the most important loan processing fees out completely. Here are several tips to help you make sense of mortgage fees and avoid paying too much for your next mortgage loan.

Your Good Faith Estimate is Just an Estimate

The most important thing to understand about the Good Faith Estimate is that it is just an estimate. Mortgage brokers frequently lowball loan processing fees to make their loan offers appear more attractive. Brokers also frequently leave their markup of your mortgage rate off the Good Faith Estimate completely. If the Good Faith Estimate is unreliable, what can you use to get a good idea of what your loan processing fees are?

The good news is that the HUD-1 will accurately reflect all of your loan processing fees and markup. The problem is that you will not typically receive this document until 24 hours prior to closing. Once you have reconciled the loan processing fees and markup on the Good Faith Estimate with your HUD-1 statement you will need to have a heart-to-heart discussion with your mortgage broker about any discrepancies you find.

Beware Mortgage Junk Fees

There are a number of junk fees on your Good Faith Estimate and HUD-1 statement that you need to be aware of. One of the most notorious junk fees is the so called “rate lock fee.” Mortgage brokers charge this fee for “locking in” your mortgage interest rate. What you need to know about rate lock fees is that lenders do not charge your mortgage broker a fee for locking your rate. This fee is entirely invented by your broker to line their pockets at your expense and is complete garbage.

Other junk fees you need to keep an eye out for include broker courier fees, application fees, and loan processing fees. Many mortgage brokers try and justify their loan processing fees by telling you that they use a “professional loan processor” to prepare your file and charge you as much as $500 for the service. What do you get for your $500? Your “professional loan processor” will print out the required documents and mail the application and disclosure statements to you for signature, and then FedEx the entire folder to the underwriter for loan approval. Total “processor” time necessary, one hour maybe two…Is this paperwork shuffling worth a $500 fee? I don’t think so…do you?

Watch Out For Yield Spread Premium

If you’re not already familiar with Yield Spread Premium it is the markup your mortgage broker adds to your mortgage interest rate to get a commission from the lender. Many brokers leave this markup of your Good Faith Estimate altogether and then cleverly disguise it on your HUD-1 statement. When questioned about Yield Spread Premium many mortgage brokers get defensive, even angry. Your mortgage broker might tell you that because the fee is not coming out of your pocket you shouldn’t worry about it. The problem with Yield Spread Premium is not the fact the lender is paying the broker a fee, but the reason the lender is paying your broker a fee. Your broker receives this fee because you’ve agreed to pay an above market mortgage rate and for no other reason. In fact, Yield Spread Premium is the number one reason people overpay for their mortgage loans and according to the HUD Secretary is responsible for overcharging homeowners in the United States nearly sixteen billion dollars each year.

Avoiding Yield Spread Premium needs to be your number one priority when applying for a mortgage loan. If you’d like to receive more advice about taking out a mortgage without paying too much, register for the free mortgage refinancing blueprint available from this website.

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Related Articles at Mortgage Refinance Information:

• Loan Origination Fee


• Mortgage Refinancing: How to Read Your Good Faith Estimate


• Compare Mortgage Fees


• Mortgage Refinancing Costs


• Mortgage Broker Good Faith Estimate

Cramer defends himself against a demand of a New Jersey based Realtor group to retract his Today Show comments about not buying homes right now. His gift of aphorism is brilliant for our day and age of 2-second sound bites. Of course a New Jersey Realtor group had to complain that Mr. Cramer was inaccurate because “It is a buyer’s market” - which just makes me laugh.

Someone at these Realtor associations should put up a sign to stop and think before sending anything to the press; they just look really, really ridiculous.

Most of the Realtors I have met personally are smart, savvy, experienced, friendly, funny, dynamic and fun to be around. It is amazing that quality people allow themselves to be led by a bunch of monkeys.

Enjoy the video:

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