- My Mortgage Company Owns My Mortgage
Where you send your check is not who 'owns your mortgage'. This is identical to assuming your stock broker, who you buy shares from, owns IBM or iNTEL when you buy those stocks from him.
Your mortgage is in a big group of mortgages, sold to Fannie Mae or Freddie Mac, then sold to Wall Street. You are sending your check to the mortgage 'servicer'. In 2005 the mortgage servicers became wise to this misconception and began using terms like, "We want to keep you as a customer" This helped them generate a sizable commission when borrowers refinanced with thier perceived friendly bank. Of course, these loans were always .25% - .5% higher than market.
2. Mortgage Brokers are Bad, Banks are Good
Yes, there were mortgage brokers that bribed, stole and cheated. They are out of the business. Oregon, as of 1/1/2010 now pulls FBI fingerprints and is even looking at a mortgage brokers personal credit report before issuing a license. If their PERSONAL credit history shows a lack of personal financial responsibility, they cannot be a mortgage broker in Oregon. If they have ever commited a felony or any financial fraud in the last 7 years OR lost their licence in any state at any time: they cannot be a mortgage broker. They can however work for a bank or a credit union. Federally chartered banks are not under the jurisdiction of the state. California state learned this when they tried to kick Wells Fargo Mortgage out of town for illegal activity. Their lawyers deftly explained California does not posses the legal authority to protect the citizens from a bank, the Office of the Comptroller is that sleeping overseer.
I have a college degree in economics, own my own company, live in the community I service and can operate my business in such a way to minimize cost. What do my customers receive? Better loan, better price, superior service and lifetime free expert advice. It is a no-brainer in my book.
3. Credit Unions are Different
If you need a second mortgage or a car loan: yes. Credit unions are fantastic with HELOC loans. For 30 year fixed mortgages? they are .25% more expensive than a broker. On $250,000 loan that is $15,000 more. Not exactly non-profit for someone.
They do not keep your mortgage, they sell to Fannie / Freddie just like everyone else. They do often retain servicing, meaning they get paid to collect your check. Do you want to give me $15,000 so you will write a check to me forever and not have to change where you send the check? Then why would you give that money to your credit union.?
Put another way, on 30 year fixed; your credit union is an expensive mortgage broker. If you want an Adjustable (ARM) or HELOC, use your credit union. If you want a fixed, use a broker.
4. Banks and Credit Unions are easier
Nobody is easy circa 2010. May as well pay less, get more. Lending is HARD these days. Would your credit union member drive to your house on a Saturday and help you find a W-2 in a stack of boxes? I did that yesterday.
5. Banks Have Experts
Do you expect a bank teller to sit with you and have a cost breakdown of four loan scenarios and how they compare after five, and twenty years? I do that on every loan application. If you don't get this level of detailed expert assistance then you paid more for less on your last transaction.
The only thing banks are experts at is making money from your money and making you think they are doing you a favor. Proof? How was your 2009 bonus? Things were tough financially? Where did the money go? Did you hear that bankers all received mega-million dollare bonuses last year? Goldman Sachs had their most profitable year ever last year?
Remember the movie Superman III with Richard Pryor as Gus Gorman? No? Netflix it. Gus Gorman is a computer genius and discovers how to steal money from his employer. The executives are standing around wondering how they will ever find the criminal. The next morning, Gus Gorman roars into the parking lot with a new bright red ferrari. The bankers and Wall Street stole your money folks! Quit being idiots and pretending your bank is protecting your from the lions. They ARE the lions!!!! The lions know that the biggest sum of money you will ever have is your monthly mortgage payment. You need to have someone working for you that is 100% up front where and how much they are being paid.
6. Banks Don't Charge
You need to look at total cost and interest rate. The new Good Faith Estimate does a very good job of breaking down to brass-tacks, how much closing costs at what rate.
Have yet to see a bank actually issue the new federal GFE. If there is a way to bend the law, banks are the first to find it.
7. Brokers VS. Banks
The single biggest mortgage broker fraud ring I have read is $20M. It was in a state that didn't license loan officers. That is a ton of money and they are going to be doing serious prison time.
However, there wasn't $1 issued of the $800 Billion to a mortgage brokerage. How did your 401K do last year? Most dropped 50% in my circle of friends. Since you can't point your finger and say, "He/She caused this" you can't arrest anyone.
If you are enough of a genius to steal $12 Trillion Dollars from the world economy, give yourself a $1.1Billion paycheck (CEO AIG) and not go to jail... The billion dollar bonus checks are the RED FERRARI!
I know it sounds complicated, but please, for once, stop being apathetic.
