Posted by Charles_Ca on 11/12/07 11:59am
Msg #220842

nteresting discussion of YSP and SRP ...

This site has an intersting discussion about the fees involved:

http://ezinearticles.com/?Mortgage-Service-Release-Premium&id=494932

Many homeowners choose their Bank when taking out a mortgage loan. Banks are a convenient way to get a mortgage; however, this convenience comes with a price. Bank mortgages include a hidden fee called Service Release Premium. Here are several tips to help you avoid overpaying for your mortgage if you are considering borrowing from your Bank.

The most important thing you need to know about Bank mortgage loans is that banks are exempt from the Real Estate Settlement Procedures Act (RESPA). RESPA laws protect borrowers by requiring lenders to disclose information about their mortgage profit margins. Your Bank is in the mortgage business to make money and they do this by selling the mortgages they originate on the secondary market.

What is the secondary mortgage market? This is where mortgage debt is pooled together by lending institutions such as Fannie Mae, insured and sold to investors. If you take out a mortgage from your Bank they will turn around and sell the loan as soon as it is funded. The higher your mortgage rate, the more money the Bank receives when selling your loan. This is where Service Release Premium factors in.

Similar to Yield Spread Premium, Service Release Premium is the markup of your mortgage interest rate to boost the Bank’s profits on the secondary market. Your Bank knows what wholesale mortgage rates are; however, the Bank’s rate sheets are marked up to boost their profits when they sell the loans. This markup is Service Release Premium. Because the Banks are exempt from the Real Estate Settlement Procedures Act, they are not required to disclose this markup.

Bank employees will show you their Bank’s mortgage rate sheets, often swearing there is no markup. Ask your Bank representative to pull up the weekly yield on Fannie Mae’s website and explain the difference between Fannie Mae’s yield and the Bank’s rate sheets; they won’t be able to give you an explanation. The bottom line when taking out a mortgage loan: never take out a mortgage from your Bank.

Reply by DianeCipa on 11/12/07 1:26pm
Msg #220859

"The most important thing you need to know about Bank mortgage loans is that banks are exempt from the Real Estate Settlement Procedures Act (RESPA)." hogwash

This is mortgage broker propaganda. If you'd really like some good mortgage banking info, Tanta on Calculated Risk is a good teacher. The Ubernerd posts are a good resource. Here's a link:

http://calculatedrisk.blogspot.com/2007/07/compleat-ubernerd.html

Reply by Charles_Ca on 11/12/07 2:05pm
Msg #220867

I know your goal is world domination, at least the notary

signer world. If no one else cares why should I? Its real easy to brand everything as hogwash except as it relates to your particular agenda. But I have no axe to grind here, I have my own little worlds to conquer and I've reached self actualization: I'm quite content. It doesn't matter that most here have no idea what this discussion is about and don't appear to care. They are even too lazy to get their own work. So if you want to eliminate independant notaries in the closing process be my guest. I will get my real estate transferred one way or another and frankly would prefer to do it electronically and get rid of everybody in the middle. So you and your minions have at it! I don't even like mortgage brokers particularly and prefer to deal with my banks which is what I do.

Reply by DianeCipa on 11/12/07 3:22pm
Msg #220874

Re: I know your goal is world domination, at least the notar

Ahh, nice to meet the real you, Charles.

Reply by Charles_Ca on 11/12/07 3:34pm
Msg #220876

Its always the real me! n/m

Reply by JanelWI on 11/12/07 5:24pm
Msg #220898

Re: Charles.....honestly what are you doing here on

this forum? Is this your infantile way of trying to save us all from ourselves? Stomping your virtual feet over a disagreement with Diane? Calling most of those on this board uncaring minions, with no potential grasp of what is simply a difference of opinion of what this bill means for NSA's? We middle folk; who you would rather see superseded by electronic means anyway?....so why bother posting at all????just well, to put it as simply for you as I can.....is insulting.

You know Charles. I thank you for your input on this forum and the info you put out there. However I would never venture to think that my opinions of those I have never personally conversed with or gotten to know on the whole just don't care about where the future of this industry is going. I am sorry you have such a low opinion of most. In your acquisition and proclaimed arrival at complete self actualization you must have gotten there all on your own without the help of those who are looking for services such as yours, which ironically makes you a middleman.

Reply by Carolyn Bodley on 11/12/07 7:03pm
Msg #220910

Re: Charles.....honestly what are you doing here on

Between this power stuggle between Diane and Charles, I've not had the desire or inclination to read their bantering -- the majority of their posts should have been conducted in private e-mails.

Reply by Loretta Reed on 11/12/07 8:54pm
Msg #220925

Re: Charles.....honestly what are you doing here on

I think they have a difference of opinion. I don't agree with everything that everyone says on here. Seems like some people can have a difference of opinion and still be treated fairly and others are not.

Reply by CaliNotary on 11/12/07 11:00pm
Msg #220948

Amen to that Carolyn

The Charles and Diane pissing contest has gotten quite tiresome. I haven't even read hardly any of it, I'm just sick of seeing these huge threads filled with their names. Can't they just both be pretty and call it a tie?

Reply by Charles_Ca on 11/12/07 8:55pm
Msg #220926

So tell me Janel, what is it that's on your mind? n/m

Reply by JanelWI on 11/13/07 8:06am
Msg #220969

Re: So tell me Janel, what is it that's on your mind?

Observation only. You make yourself quite known. No mystery.

Reply by Negrete on 11/12/07 2:03pm
Msg #220866

So, do I take a higher rate from a broker or do I take a higher rate from my Bank ?

Sounds to me like as a consumer I get to pay it either way.

Please correct me if I am wrong Charles. I am not all that up on loans, but it sounds to me like I am going to pay the bank for doing the loan or I am going to pay the broker to do the loan.

Anthony J Negrete

Reply by Charles_Ca on 11/12/07 2:33pm
Msg #220870

Nice chatting with you Tony! Good luck! n/m

Reply by Negrete on 11/12/07 2:40pm
Msg #220871

You also Charles N/M n/m

Reply by Loretta Reed on 11/12/07 4:32pm
Msg #220891

I can give you an example.

My brother in law and sister wanted a home loan. Their first call was to me. I offered them a loan at 6% for 30 years fixed rate with 1 point origination fee. Wells Fargo offered them 6.5% with no closing costs. They chose the Wells Fargo deal because it "looked" better but really wasn't much different. You do have to pay either way.

Reply by Philip Johnson on 11/12/07 9:07pm
Msg #220929

A half a percent over 30 years can add up to quite a bit

more than reasonable closing costs on a good size loan.