{"id":3185,"date":"2008-05-31T23:58:01","date_gmt":"2008-06-01T06:58:01","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=3185"},"modified":"2008-05-31T23:58:01","modified_gmt":"2008-06-01T06:58:01","slug":"whos-a-mortgage-fiduciary","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3185\/whos-a-mortgage-fiduciary\/","title":{"rendered":"Who’s a Mortgage Fiduciary?"},"content":{"rendered":"

Are you ready for the next big argument about fiduciary capacity? It’s coming in the form of national loan originator licensing<\/a> and it promises to be a doozy.<\/p>\n

The Federal Housing Finance and Regulatory Reform Act of 2008<\/a> is proposed legislation that seeks to license anyone who quotes rates or fees to borrowers (among other things). It’s a political stunt, veiled as consumer protection that is yet another revenue racket for the government. It’s requiring a 20 hour pre-licensing course, with testing and national fingerprint registry<\/a>.<\/p>\n

Anyway, there’s a lot of talk about “acting as a fiduciary” to the borrower. The rhetoric leads me to this conclusion; it just can’t be done (at least under the current environment). A fiduciary is someone who subordinates her interests to her client’s. I just can’t determine how a mortgage banker can TRULY act as a fiduciary; they don’t have all the product offerings available.<\/p>\n

Wells Fargo doesn’t offer negative amortization loans . Contrary to what you hear in the media, there are times when a negative amortization loan is JUST what the doctor ordered<\/a>. If someone has a large amount of debt, it might be in their best interest to defer interest (at 6.75% pre-tax) so that they can free up some cash flow to pay down the higher interest debt (at 13% post-tax). In this flat housing market, it may be the only chance someone has to improve their credit score by swapping 13% money for 6.75% money<\/a>. Many bankers can’t offer that product. Would they refer that loan out to a specialist (like an attorney or doctor would) or “sell” the client on the “in-house” loan program?<\/p>\n

Conversely, would a Wachovia originator, who just cashed a check at Bank of America and noticed that they aggressively priced their 15-year loan, refer that loan across the street or write it at .25% higher?<\/p>\n

Mortgage brokers, then, should be perfectly positioned to act as “true” fiduciaries. If transparent brokerage compensation<\/a> was pre-negotiated in an exclusive right-to-finance agreement (much like a Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Are you ready for the next big argument about fiduciary capacity? It’s coming in the form of national loan originator licensing and it promises to be a doozy. The Federal Housing Finance and Regulatory Reform Act of 2008 is proposed legislation that seeks to license anyone who quotes rates or fees to borrowers (among other […]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[26,5],"tags":[],"class_list":{"0":"post-3185","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-lending","7":"category-real-estate","9":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1964,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1964\/can-the-nar-improve-a-buyers-financing-experience\/","url_meta":{"origin":3185,"position":0},"title":"Can the NAR Improve a Buyer’s Financing Experience?","author":"Brian Brady","date":"September 23, 2007","format":false,"excerpt":"Realtors have to stop complaining about the sorry status of the lending industry. Why? They have the power to make a difference but refuse to take action. I have often heard the Realtors' cry for licensing of loan originators and a plea for lending advisers to adopt a fiduciary capacity\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2176,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2176\/hr-3915-anti-consumer-bank-protection-act-of-2007\/","url_meta":{"origin":3185,"position":1},"title":"HR 3915: Anti-Consumer Bank Protection Act of 2007","author":"Brian Brady","date":"November 6, 2007","format":false,"excerpt":"HR 3915, the Anti-Consumer mortgage bill has passed the House Financial Services Committee. This was expected. The committee is chaired by the bill's sponsor, Barney Frank. This bill seeks to destroy the consumer protections, guaranteed by free markets, through: a legislated oligopoly, a reduction is loan choices, and a contraction\u2026","rel":"","context":"In "General"","block_context":{"text":"General","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/general\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":17031,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/17031\/if-youre-an-ordinary-salesmonster-and-you-rook-some-sucker-into-a-raw-deal-youre-just-a-sleaze-but-if-you-are-fiduciary\/","url_meta":{"origin":3185,"position":2},"title":"If you\u2019re an ordinary salesmonster and you rook some sucker into a raw deal, you\u2019re just a sleaze. But if you are fiduciary…","author":"Greg Swann","date":"September 16, 2020","format":false,"excerpt":"Me, this morning, at LinkedIn: The words that are going to matter, when all this #iBuyer nonsense all blows up, are: \u201cAgency with an interest.\u201d Real estate brokers are fiduciary. They are obliged as agents to put the interests of their clients ahead of all others \u2013 including their own.\u2026","rel":"","context":"In "Egoism in Action"","block_context":{"text":"Egoism in Action","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/egoism-in-action\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-content\/uploads\/2020\/09\/steve-harrris-aTuAKskNy7Y-unsplash-320x480.jpg?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":967,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/967\/a-selfish-case-for-national-originator-licensing\/","url_meta":{"origin":3185,"position":3},"title":"A Selfish Case for National Originator Licensing","author":"Brian Brady","date":"January 29, 2007","format":false,"excerpt":"There is a movement to create a national licensing platform for loan originators similar to the one the National Association of Securities Dealers (NASD) requires for registered representatives. Supporters of this movement claim that originators must be licensed because the quality of advice given to the consumer is woefully inadequate.\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":8579,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/8579\/can-a-realtor-truly-be-a-consumer-advocate\/","url_meta":{"origin":3185,"position":4},"title":"Can a REALTOR Truly be a Consumer Advocate?","author":"Thomas Hall","date":"June 1, 2009","format":false,"excerpt":"My query is sincere.\u00a0 But first, I want to make a distinction between a REALTOR and a licensed real estate agent.\u00a0 NAR tells consumers to seek the counsel of REALTOR - in fact, make sure they are working with a REALTOR, leading consumers to believe that a licensed real estate\u2026","rel":"","context":"In "Dirty Laundry"","block_context":{"text":"Dirty Laundry","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/dirty-laundry\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":7867,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/7867\/california-proposes-to-regulate-realtors-alongside-pawn-shops-and-lenders-and-banksoh-my\/","url_meta":{"origin":3185,"position":5},"title":"California Proposes to Regulate REALTORS Alongside Pawn Shops, and Lenders, and Banks…Oh MY!","author":"Brian Brady","date":"April 14, 2009","format":false,"excerpt":"Assemblyman Pedro Nava sponsored a bill (CA-AB33) to reorganize our state's financial services' regulators to be under one umbrella, the newly created Department of Financial Services.\u00a0 The idea is to save a bunch of money for the State. Of course, CAR is going nuts.\u00a0 Amy Steele reports via ActiveRain.com: AB\u2026","rel":"","context":"In "Big Mother"","block_context":{"text":"Big Mother","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/big-mother\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/3185","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=3185"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/3185\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=3185"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=3185"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=3185"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}