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  1. #1

    Never Refinance Your Mortgage Loan With a Bank

    I. Banks Are Exempt From RESPA

    The Real Estate Settlement Procedures Act exists to protect homeowners from abusive lending practices by requiring lenders to disclose their fees and markup. Thanks to the Banking Lobby the law was changed to exclude banks from this requirement. The lobby spent millions of dollars romancing Congress to give banks an unfair advantage over their customers. Would you ever consider taking out a mortgage from a lender that doesnít have to play by the rules?

    II. Banks Markup Up Their Mortgage Rates

    If youíve been researching mortgage loans online you may have heard of Yield Spread Premium. This is the retail markup of your mortgage interest rate when you borrow from a wholesale lender. Bank loans donít have retail markup of this type; however, they mark up mortgage rates to above-market values to boost their profits. Banks make the majority of their profits selling mortgage loans to investors on the secondary market; mortgages with above market interest rates give them a premium profit. The markup of your mortgage rate for this reason is called Service Release Premium. Because your bank is exempt from the Real Estate Settlement Procedures Act they will never disclose or admit to this markup. Fortunately for you, there is a way to spot it.

    III. Bank Employees Will Swear Their Rates Arenít Marked Up

    Most bank employees have never heard of Service Release Premium and have very little knowledge about the mortgage industry as a whole. They will swear to you that the interest rate is not marked up in any way and even show you the bankís rate sheets.

  2. #2
    Join Date
    Nov 2007
    Posts
    4,265

    Re: Never Refinance Your Mortgage Loan With a Bank

    Markup, spread, etc....doesn't matter. What matters is the rate you get. If a bank offers you 4% and a mortgage broker offers you 4.5% for the same term loan....guess which one is cheaper, regardless of the included markup?

    Let me guess, you are representing a company that people *should* be doing business with instead of doing business with the banks.

  3. #3
    Join Date
    May 2005
    Location
    Planet Gong
    Posts
    1,032

    Re: Never Refinance Your Mortgage Loan With a Bank

    Quote Originally Posted by calvinandhobbes View Post
    Let me guess, you are representing a company that people *should* be doing business with instead of doing business with the banks.
    Yes, he is.
    Pull up his profile, and read his Signature.

  4. #4
    Join Date
    Jul 2006
    Posts
    7,767

    Re: Never Refinance Your Mortgage Loan With a Bank

    he doesn't have a signature after being banned.

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