There’s always something to howl about.

Is Hyper-Transparency A Cover For Mediocrity ?

Which one of these loans is better?

A- Loan docs at 6.5% with 1 point cost, disclosed at 6.5% with 1 point cost 30 days earlier…OR…

B- Loan docs at 6.5% with 1 point cost, disclosed at 6.25% with 1 point cost, 30 days earlier,  but the originating broker negotiated the 1 point cost before application ?

There is more than one correct answer:

If you said A, you appreciate integrity of expertise and execution. You understand that the originating broker stuck her neck out at quote time and delivered on her promise, regardless of the changes in underwriting and market fluctuation.  She assumed the interest rate risk and underwriting risk of the loan after reviewing a borrower’s application, supporting documentation,  and credit report.  She may have earned an extra .5% by properly executing the rate lock (because she subscribes to MBS pricing)

If you said B, you appreciate the integrity of hyper-transparency in lending.  While the originating broker may have made some mistakes in lock execution and underwriting analysis, he did act in the borrower’s best interest and collected only what he negotiated.

If you said that neither were acceptable, you probably haven’t had a transaction close in the past 8 months.

Which will you choose as the better customer experience?