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A Price War During a Difficult Time for Originators
"United Wholesale Mortgage may be wildly popular with the loan brokers that use its table funding money to close residential loans, but increasingly the Pontiac, MI-based company is rankling its competitors by engaging in what some consider “kamikaze” pricing.
A few weeks back, the nation’s largest wholesaler — and largest overall lender — announced it would expand a temporary rate-buydown program, giving borrowers a year-one discount of up to 300 basis points on conventional and government loans.
In a rate grid published on its website, UWM said a borrower might pay 4.75% in the first year, though that rate would increase to 7.75% in years four through 30 — a difference of 300 basis points.
One investment banker, speaking under the condition his name not be used, said the rate cut, although temporary, “will come back to smack them in the ass.”
He added, sarcastically, “Who cares about profits when you are the greatest mortgage force in the universe?” For the full story, see Inside Mortgage Finance, now available online."
http://www.insidemortgagefinance.com/articles/226354-a-price-war-during-a-difficult-time-for-originators?v=preview
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