Mortgage Broker

Here is my experience so far:

I was originally planning to buy in Manhattan on the UES, but bought in Port Washington, NY because the wifey loved it and she wants to raise our newborn in the burbs. We are close to closing and I was in charge of shopping for mortgages.

With that said, here are my experiences so far as a first time buyer. I will note what might be different for an UES apartment.

I compared three mortgage reps.
- Wells Fargo on 5th Ave.
- One from JP Morgan Chase just for the hell of it.
- One small time mortgage broker from a discount mortgage company.

Short answer:
- Wells Fargo had the best rates, and the quickest turn around.
- JP Morgan Chase was the worst rates, but they were a little more lenient on the mortgage conditions.
- The Mortgage broker just plain sucked. Maybe the one I decided to give a try with was a dud.

Long Answer:

(You should shop for a mortgage within a 30 day period because the credit agencies will count all credit checks in a 30 day period as one credit check which bring down your credit FICO score.)

(Shop around REGARDLESS. Met a lot of shady shady mortgage brokers and even direct bank reps. I am convinced that 50% of them are all crooks. Get recommendations from people. That’s a good start. I would avoid recommendations from realtors… I tried their recommendations… most of them sucked or were crooks… so I stopped asking realtors for recommendations. Oddly one condo development recommended a Wells Fargo rep, and I have ended up using the same person I was recommended by the developer. Go figure.)

Wells Fargo:
- Best rates for ful doc mortgages. Far more flexible when it comes to condos only being 50% sold. Need a FICO score (take the middle of the three scores) no less then 720. Locked at 5.25% Missed out on a lock at 5% a few weeks ago.
- Wouldn’t allow for my S-Corp income to be leveraged on the mortgage because I don’t have at least two years of consistent income. Same applies to any investments, CDs, money market accounts, etc…
- Allowed for condos to be only 50% in contract/sold. Other lenders usually require to be at 66% or higher. Wells Fargo was definitely Condo friendly when we were shopping condos at the time early in the summer.
- At first, I thought Wells Fargo was slow as hell, but relative to the mortgage broker and what I heard from friends from other large banks, Wells Fargo was super fast on getting a commitment letter once I provide most of my docs. Took less then a week. So far, they are on pace to close in less then 45 days since the contract was signed. Mind you, it takes much longer on co-ops (more like 6 months because of board approvals. Condos/No board co-ops will be less (3 months). 1 month closings are rare, but doable.

JP Morgan Chase:
- Worst rates, and they wanted me to pay points (1 point = 1% of the mortgage amount) to get rates that were at most 1/8% less then Wells Fargo. What gives?
- Allowed some leniency for non-full doc mortgages. I didn’t bother processing my papers with their underwriters, but I was told that they can leverage my S-Corp income. I wasn’t that desperate.
- I forget what the condo requirements are but they did require more then 50% sold/in-contract.
- Dunno on how fast and smooth they can close, but from what I read in some forums, JP Morgan Chase and Bank of America have stalled some closings. Might have been bad timing in this economy. Wells Fargo doesn’t have the best track record, but mostly from some bad apple mortgage reps who aren’t up front. You will find them everywhere.

Mortgage Broker:
- Supposed to get the best rates. They quoted me the exact same rates from Wells Fargo that I was quoted that day. (Mind you, rates changed 4 times that day.) On top of that, they admitted that Wells Fargo offered the lowest rates with 0 points, and that the mortgage will most likely come from them to get the best rate. I asked them how they make their money. They told me that they are getting a wholesale rate from Wells Fargo, and that they basically make money by adding 1/8% or 2/8% on top of the rate. At the end of the day, it was the exact same rate. I was deeply confused. Maybe it's just harder for mortgage brokers to get you a good deal. Not sure. When I asked the Wells Fargo rep, they told me that these days, it doesn’t matter. Either Wells Fargo is making off of me or the mortgage broker. It’s more about who understands the process of getting that loan better (as in cheaper and quicker.)
- In terms of weird situations on how you doc your income or a condo development that has less then 50% sold/in-contract, this is where a seasoned mortgage broker comes in handy. If going to the big banks shut you out, a mortgage broker can figure it out on your behalf… and you just might, MIGHT get a pretty good rate on the loan amount you are looking for with a few points added to your closing costs. (All mortgage brokers by law have to disclose to you the points or “origination” fees (usually a percentage of the loan amount) they are charging for their special service.) This is defiantly not a good market for people with poor FICO scores, and crappy income doc situations. Oddly, if you were to buy a mixed use property with Subways as your tenant, it’s like super easy to get a commitment letter. Go figure. Trust me, I looked into that too.
- Supposed to be the easiest since they will tell you what docs they need to make it happen, and deal with the underwriters more efficiently. In my case, I gave the most amount of documentation to the broker, and got really nothing out of it. I was basically promised all these things, so I thought great, I want to close sooner then later. So to just compare on how fast they were, I basically gave all my info to the Wells Fargo rep and the mortgage broker. Wells Fargo asked me for specific docs like just two paystubs verses 2 months from the mortgage broker. Crap like that. Wells Fargo got me a commitment letter in less then a week. Nothing from the mortgage broker after countless follow ups. I was just told that Wells Fargo let go a lot of underwriters to draft up commitment letters. Maybe it was true. Who knows, but all I know is that I am all set with Wells Fargo.

Forgot one more thing. Wells Fargo requires a 25% down payment to get the best rates. Add 1/8% if you want to put down 20%. Don't think they are doing less then 20% unless its FHA approved... and those will definatley need near perfect docs. Never really looked into it since I was planning to put down more then 30% anyhow.

eastside - Ive been on both sides of the field and I think it always comes down to the individual loan officer. A good loan officer isnt determined by who he/she works for. You can talk to 2 different loan officers at the same bank or mortgage brokerage and get 2 completely different results.

The bank lends directly and have a lot more control over the transaction. And yes your loan officer at the bank will handle everything from "soup to nuts." A mortgage broker usually ends up going to the bank you can go directly to. However, the advantages the mtg broker has is that if your loan is a bit out of the box they have different bank options. It also depends on how much youre willing to do. Some people might say, why go to a mortgage broker when you can go to 2 or 3 different banks and compare. But in the end, I think it is always best to talk to both. See who you feel comfortable with because its about a 60 day process and youll be talking to that person quite often often. Who will be there with every question you have. The last thing you want is someone you cant get a hold off.

In this market, I think if youre purchasing a coop or condo it makes a difference as well. Banks are more in tune with the individual building and have a clear picture of whether the building is approved.

And finally, trust. Who do you trust? Who will keep their promise and make sure what they promise is what youll see at the closing table. Hope some of this helps. sunny.hong@bankofamerica.com

Just to touch upon how mortgage brokers are paid by the banks since Jac mentioned it. The bank offers the mortgage broker a rate sheet. There is a par rate where the mortgage broker will make $0. They either have the choice to charge points (origination fee) to give that rate or upsell the rate so the bank pays the mortgage broker. Please remember origination fees and rate discount fees are different. With discount points you are paying points (1 point = 1% of the loan amount) get a rate below regular market level.

shong, are you a loan officer? if so, will you give me a good rate if I go through you for my purchase (probably next year ) ? :)

actually, going to wells is fine if (its that time of the month), you have a plain vanilla loan- however if there are layers to your loan, (super jumbo, non fannie mae loan, special needs, etc. HELOCS, High LTV, $2M HELOC, etc.) then the broker (if he is qualified!) can really come up BIG, there are many lenders (portfolio) that do not sell their loans and have different requirments and needs. Some of them are priced much, much better then wells, also there are other regional banks that have vanilla programs that are much better priced then wells (at certain times).

As everyone now knows that banks sell their loans so that they can go and make new loans. Morevoer, at certain times when the banks have met their needs (have enough loans to package and sell) they walk away (raise their rates). Banks are constantly adjusting their rates for several factors (bond pricing, and their supply in pipeline and closing so that they can package off their loans and sell them).

this is where a qualified mortgage broker is able to assist, all banks are not built the same, banks have different programs and different niches.

thanks...so are you saying if a mortgage broker offers 5.5% and lets say citibank offers 5.5%......would the mortgage broker add an additional fee or is it buried in the 5.5%......are points always charged on a plain vanilla mortgage?

Eastside, it depends on your conversation with your broker and your GFE, (on a side note, Citi is very well priced right now, depending on type of loan), no points are not always charged, to actually see all your fees (not just the ones verbally quoted, you should look at your GFE, TIL and all disclosures including compensation, the way the new rules are written if your rate changes or fees ,then bank/broker needs new disclosures. Which can really delay closings (article in NY Times).

To give you an accurate idea on closing prices and rates, i would need more info- type of property, loan amount$ purchase price, rate quoted. type of loan (fixed adjustable/ FHA?)

ive gone direct to wells with good experience and also to mtge bros with good exp
a good mtge bro will shepherd your app and provide other services and should be paid by the lender such that you receive the same terms you'd receive going direct
be veerrry careful to use a bro with a good rep--many mtg bro's tell you theyve locked your rate when theyve not--they play the option that rates go lower while you wait to close--if rates go lower they provide a mtg with terms that include the higher "locked" rate--free money for them--if rates go higher its "oh shit, there was a problem with your app after all"...or "some credit issues popped up with your wife, so the lock is not being honored by the bank" blah blah..and you end up walking away in lieu of watseful litigation, and starting freshh with another entity at higher rates...and you can end up with liabilities re your closing terms

It has been my experience of late to not go directly to the banks for a mortgage. I've had several of my customers waiting at least 2 months for a mortgage commitment with the banks continually stating they are inundated with loans. We recommended a mortgage broker we have experience with and trust implicitly. He was able to get the bank commitment and appraisal withing two weeks of receiving the application. Chase kept promising the commitment letter and appraisal week after week. We finally advised our buyers to pull the loan from Chase, once they did Chase called ready to schedule the appraisal. Also, my advise is to avoid Wells Fargo for a mortgage. Go to a good mortgage broker or smaller savings bank.

we just used this guy - very professional:

MICHAEL LANNING
Private Mortgage Banker
Wells Fargo Home Mortgage
N2652-151
530 5th Ave
New York, NY 10036
(212) 805-1023 Tel
(917) 514-1138 Cell
(212) 805-1024 Fax
Michael.Lanning@wellsfargo.com
www.wfhm.com/michael-lanning

I guess this all shows that you really gotta do your homework and try them all... and with a little bit of luck you get the right person from the right lender.

I had a great experience when I used a broker at Manhattan Mortgage, but on this go around tried it myself and did really well with Chase. Didn't opt to buy yet...but they were very reasonable in theirterms.

We shopped around and in the end we used Sunny Hong at Bank of America, who has posted on this thread. We were very happy with the level of service we got from Sunny.

Bank of America was just okay (although they offered a competitive rate, their lock in period is not very long - 60 days - for NY coop closings). However, we did close on the 60th day. The best thing was that Sunny was always responsive, always available and could smooth through, and ensure we got a response on some of the delays we had with Bank of America. So, I would not hesitate in recommending Sunny.

We also tried Chase and Citibank but their agents were both quite evasive about their fees. We also tried Manhattan Mortgages and left messages with two different brokers .... neither responded to our phone message which is not exactly encouraging.

Need some advice - am going into contract on Monday. Have made contact with a mortgage broker and also started working with someone from a direct lender (Wells Fargo). I also touched base with Chase (via the 800 number) and was given such a run-around that I've been sufficiently turned off.

What's the best way to approach this so I get the absolute best deal?

Thanks,

After talking with banks (on phone and in branch), I went to mortgage broker.

Why:
Banks give you better rate over the phone via 1800. The branch guys tend to add percentage in quoted rate as their commission. 1800 person is not familiar with local (one person has never heard of coop). 1800 and branch people are very hard to get a hold of (while one lady on 1800 give me 1 hr call back). Branch guys are very eager to get you in but then they trail off once the process gets going (from experiences of 3 friends).

In both instances, even if they tell you that they locked in the rate, they wont. They gamble with your quoted rate. They wont lock it in but they say they did and hope that the rate would fall. They pocket the difference. In the middle or near end of the process, if the rates go higher, they say that there was a problem and need to reapply, use current higher rate. This happened to 2 of my friends. Both broker and banks, could not sufficiently explain to them why there was a problem.

At the end, I choose the lesser evil. While I continue to check out the rate personally, I rely on my broker to find the best deal and also condition for the loan. The negotiation of the conditions gets handled by the broker (as far as I can tell). I did not want to talk to banks and it's conditions.

Out of the brokers, I talked to few but ended up at this broker / company with recommendations from my former broker and my lawyer. Manhattan Mortgage seemed pretty good at first but as I started to ask more questions, they started to get annoyed and dismissive (as I was a first time buyer).

Let me know if you want to get a contact info for my broker.

Thanks buyingnow, good info. Email me at jvfnyc@gmail.com with your broker.

I appreciate it.

I went with a mortgage broker (Manhattan Mortgage) and got basically the lowest rate I saw advertised for the type of loan I received. I got approval to close within approximately a month. (This for a jumbo on a coop.) This is my first property, so I've never received a loan directly from a bank, but I was impressed at how swiftly the loan was done through the broker. That said, we made it pretty easy for them -- good credit and 40% down.

I am close to signing a contract for a condo--25% down, and looking for a high conforming loan for a 7yr ARM. Any insihgt as to go with a broker or direct to bank? I have done some research into rates and the Wells 1800 guy is quoting 4.375% and the mortgage broker I have been talking to is quoting me 4.625%. Any insight into whether I should go w/the broker or Wells? I've had mixed experiences in dealing with the Wells application and underwriting folks, but once all the headaches were smoothed over, I found the servicing post-succesfull closing to be high. Also less fees in dealing w/Wells versus the broker. Any insight, similar experiences would be helpful. Thanks.

I have a question regarding mortgage rates. We're going with BOA and we have a floatdown lock-in. I'm trying to lock-in at a lower rate, however the problem is that I just do not know when the rates change. I see rates on bankrate.com which are lower, but they only update their boa every couple of days, and by the time I talk to our bank guy he says the rates are not available. I have no way of knowing if he is even telling the truth. Is there a website that shows the realtime BOA mortgage rates or is updated multiple times a day? Thanks.