Posted by Valcat_SoCal on 7/4/05 1:30pm
Msg #49765

Unsure how to handle this...

Hello everyone. I have enjoyed reading the many postings here, and have learned much in doing so, however, this is my first posting here because after doing a search here and on a few other boards, I have not found a real answer for this question (maybe I'm not using the correct keywords) anyway, here goes: A friend of mine is a new loan officer, and his wife is a loan processor. He wants to throw business my way...what a great opportunity I say to myself, however, how do I charge him? Like a TC, or like a SS? I kinda think someplace in the middle, but I don't want to be giving it away, but at the same time, I want repeat business for sure. Any thoughts? Thanks very much in advance.

Reply by BrendaTX on 7/4/05 1:34pm
Msg #49767

Valcat:

Maybe someone w/ more experience can answer this for you, but you should definitely not go below the TC level.

Reply by Valcat_SoCal on 7/4/05 1:38pm
Msg #49768

Being new and inexperienced myself, I wasn't sure. He is a new LO himself, but his wife has been processing for quite a while. I wouldn't mind doing processing myself in addition to Loan Signing, but that's another topic for another time....Thanks for your reply.

Reply by christisocal on 7/4/05 2:09pm
Msg #49774

I'm not more experienced than Brenda, But my daughter is a processor. Thats how I got into this biz. The company she works for chooses the price (175$) Unfortunately they've switched over to a ss ( a cheap one) But the price the borrowers are charged stays the same. So it might be the same for the company your friend works for, if so it won't matter to them, they can just give you the standard price. Sweet deal, great oppertunity!(sp) btw..... if your in the L.A.area and you have overload, I'd LOVE to help you out... ;-) lol

Reply by AnneSoCa on 7/4/05 2:51pm
Msg #49778

I'm in kind of the same situation. My sister-in-law is a loan officer and gives me all of her loans to sign. Since she's not the one paying me, and I get the loan packages and instructions from the escrow office she uses, I invoice them for the regular amount that usually gets charged. (My sis-in-law told me what the normal charges are that she sees).

Look at it this way, it's your business, if you're doing this to make money, then charge what would normally be charged. Don't go overboard. Be fair. My sis-in-law was all in favor of me charging the full amount that is normal. ($125 for a refi, $150 for a combo). I also charge extra for signings on the weekends ($25). I pick up the docs from escrow and bring them back as well, so it's a convenience for everyone involved.

Of course, that's my situation. If she were paying me directly, I might look at it differently.

Good luck!

Reply by Joanne_SL on 7/5/05 7:22am
Msg #49826

I do work directly for two lenders. They pay $200 to $250, with edocs and dependant on distance I need to travel. Most title companies charge at least $200. Don't sell yourself short.

Reply by ItsMe123 on 7/4/05 3:02pm
Msg #49780

This is a good way and a bad way to do this

I LO and "hire" my notary by directing my TC to hire who I want hired. This keeps the notary fee as part of the settlement fee and avoids another fee on the GFE and the HUD--this is very important for the LO. The LO must "shop" around for a title company that welcomes a mobile close. What a LO should do is find a title company that is not local therefore they are accustomed to the mobile close---if he uses a local one they are going to want everything done in house and use a person on their payroll to close so they do not have to pay an "outside" notary. Here is what works for me. I write on my original title order in the comments section that due to distance I will need a mobile close and that I request notary XYZ. The notary of course must already know what TC the LO is using and get on the TC's list before hand. The TC's are not crazy about this as they have relationships with SS or they have their own SS and this takes $$ out of their pockets. The settlement fee is most of the TC’s profit on a loan and now a LO is asking the TC give a good part of it to an outside contractor. Therefore it is important that the LO build a good relationship with them. The LO may see the TC responding by increasing the settlement fee to cover this. The LO then must negotiate and the best tools of the negotiation are a promise to use the TC exclusively and some volume to boot. If it doesn't work the LO must start shopping for a TC again.

To sum up your new LO has 2 choices
1. To re-negotiate his settlement fee with the TC with the consideration that the closing will not be part of the settlement. However, he will not get a good deal on this route--the TC will not decrease the settlement fee the same amount you are going to want him to pay you and he will have to disclose an additional fee on the GFE and the HUD. (i.e. he will have both a settlement fee and a notary fee.)
2. Have the LO request the TC to hire you to close all of his paper and you negotiate your fee with the TC--the important point is that the TC hires you, not the LO------he doesn't get into your fee negotiations at all. -- -this is the best way.

The first option brings a lot of issues the biggest being many TC's will not decrease the settlement fee just b/c a LO finds their own notary as I mentioned before. The LO who directly hires you has now added a "junk fee" on the HUD and the GFE. (I see people complaining about that terminology but that is just what it will be seen as in the industry) Another is a lot of TC's (if the borrowers are local to the TC) will not assume the additional risk with using an outside closer. They have no reason too if they are available to close it.

If you decide to go down the "LO hires you route" although this is the not best route, I would advise before your group gets into this to make sure both the TC and the wholesale lender is okay with this. I have heard of some LO's losing the "clear to close" when underwriting gets a whiff of the LO hiring the notary directly rather than title due to the fraud in the industry. -- MILA for example.

If the LO does hire you they are going to have to pay you as a line item on the HUD. This will have to disclosed on both the GFE and the final HUD. With this on the GFE all that has to happen for the LO to lose the loan is have the borrower go shopping with the GFE in tote. Another LO, if the borrower goes shopping, will right away point out to the borrower that they can have the closing done for "free" (as it is worked into the settlement fee). This shows the borrower right away how the new LO is going to save them money. Then the new LO starts hashing into everything else and poof---there goes the loan.

The best way to approach this is to not have the LO but instead get on the TC’s list. Call to get on the list as soon as the LO orders title. Have the LO state on the first order with your arrangement that you will be contacting them. You will then invoice title and not the LO. Then you can work out your fee with title and the LO will not have to include another fee to the borrower on the HUD---your closing instead will be part of the settlement fee. I have a lot of experience with this and if the LO wants to be competitive with closing costs this is the only way

Reply by Melody on 7/4/05 4:27pm
Msg #49786

ItsMe is right and......

I have several LOs who only want me to be the signing agent for their loans. They call me and tell me which TC is getting a specific job.

I then call the TC and tell them I got a call from X about his loan. I ask them for the arrangements they want and tell them my usual TC fee. I pick up the docs from the TC office and return to them that night in their drop box along with an invoice so the docs are ready for them at 8am when they open.

I always call the LO from my car right after the signing, no matter how late the hour. I know they are home pacing - waiting for my call.

Since I won't work for predatory lenders, "my" LOs write good deals. I am happy to refer people to them who want loans.

Reply by Valcat_SoCal on 7/4/05 11:51pm
Msg #49815

Re: ItsMe is right and......

This has been very interesting..... As I said before, I don't want to blow a good deal before it gets out of the shoot!! Thanks, everybody, for your positive input, and words of wisdom. I still have so much to learn, but this is one of the best places to start. Thanks...I appreciate it.

Reply by janetl/soca on 7/6/05 10:45am
Msg #50012

You charge him like a Title Company. There is no inbetween person so you get the full fee. I would consider $150.00.