I'm curious what the rest of the lending community thinks about the way I do business. I was reading an old post regarding escrow accounts and Paul Oaks was upset that lenders play smoke and mirrors games with the fees. This got me thinking... I don't want to be one of those brokers so tell me what you think.

On every loan I charge:
$2,000-$2,500 in origination, usually turns out to be .5%
$17.00 for credit
$500.00 for processing
$750.00 Broker fee (That is what I have to pay to my broker per file)

The issue comes in on the YSP, I always price with 1 back on the back end of the loan. Now I look at this in a very different way than most brokers. I look at this as a bonus. If the loan goes flawlessly then good for me I get a bonus. The client is happy because he had a great lending experience, I'm happy because I made a little extra money.

If there is ever an issue, I cut my origination before I would ever pass on the cost of the issue to my client, whether it was my fault or the banks. The YSP acts as a buffer, if we can't close on time I use the YSP to extend the lock, client is short to close I cut my origination to help, etc. I had to do that today, stupid Indymac can't close on time to save a life.

Anyway, what do you think? I would like everyone to respond LOs, Realtors, consumers, anyone.

Also, with 1 on the back I am always the best in pricing. I have never lost a loan because someone else had a better rate. LOs, am I considered a discount broker? Just curious.

Hello Prodigy,

Your fees are fair and I like your strategy of using YSP as a buffer. It is a healthy choice but I always work my numbers [Orig. and/or YSP] based on 3 types of clients and their drives; there's the closing cost-driven type, then the interest-rate-happy client, finally, the client who just wants a lower payment. I always determine this from the first conversation and then custom-design the numbers to fit their needs. I try to focus on a win-win plan for all parties. If I can get some buffer coming my way at the end, then it's just an extra icing!

P.S. Just FYI, it's a violation of RESPA to discuss numbers in Origination and YSP in a group and/or in public. I didn't make the rules, just a messenger They call it something like "Price Fixing" which doesn't go too well with them.

Food For Thought,

I think you are referring to Antitrust laws, I think I am not breaking the law as I am just discussing what I charge, not recommending anyone else charge the same or similar fees. Thank goodness for the free market.