{"id":3366,"date":"2008-07-16T08:49:45","date_gmt":"2008-07-16T15:49:45","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=3366"},"modified":"2008-07-16T08:49:45","modified_gmt":"2008-07-16T15:49:45","slug":"greed-is-good-but-greedy","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3366\/greed-is-good-but-greedy\/","title":{"rendered":"Greed is Good, but Greedy?"},"content":{"rendered":"

In a comment on a recent post<\/a>, I shared with David Shafer<\/a>\u00a0the “revulsion that an ignorant, greedy originator causes.”\u00a0 The Great and Powerful Oz – one of the sharpest minds in lending… actually just one of the sharpest minds\u00a0period –\u00a0called me on it and asked if I might\u00a0define “greedy originator”.\u00a0 Never one to back down from a challenge, I decided to give it a try… but in a post.\u00a0 I want to hear what the ‘hounds on the street’ think.<\/p>\n

The primary purpose of any business is to maximize profits. To quote the great Gordon Gecko<\/a>: “Greed is good.” But I believe “greedy” – especially when used in a pejorative sense as I am doing here – defines someone who has crossed an ethical line in service of that greed. Lies of commission and omission are obvious examples of such a breach. More common and more directly related to my comment, however,\u00a0is the originator\u00a0 who chooses an inappropriate product for their client because the profit in that product is greater than the appropriate recommendation.<\/p>\n

I do not believe (as I once did) that there is\u00a0a fiduciary obligation\u00a0between originator and borrower.\u00a0\u00a0An originator is not working as an agent on behalf of a client the way a real estate agent does.\u00a0 An originator is in the\u00a0retail business.\u00a0 Some\u00a0originators are in the\u00a0Kmart retail business (a market for clients who want very little service – simply shelves of loans to choose from) and some are in the diamond store retail business.\u00a0 I\u00a0argue that a great many, if not most, originators see themselves as the latter.\u00a0 In which case,\u00a0the borrower is paying the originator, at least to some degree, for their advice. There is an expectation and perception (usually encouraged if not advertised) that the originator is helping the client to choose an appropriate financial tool. Maximizing your profits in that process is just plain financially sound business practice. But suggesting a product that may not be among the best options – or in some cases is demonstratably a bad<\/em> option – solely because the profit is greater… that is crossing an ethical line and earns that\u00a0originator the Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

In a comment on a recent post, I shared with David Shafer\u00a0the “revulsion that an ignorant, greedy originator causes.”\u00a0 The Great and Powerful Oz – one of the sharpest minds in lending… actually just one of the sharpest minds\u00a0period –\u00a0called me on it and asked if I might\u00a0define “greedy originator”.\u00a0 Never one to back down […]<\/p>\n","protected":false},"author":36,"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":[5],"tags":[],"class_list":{"0":"post-3366","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-real-estate","8":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":2150,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2150\/mortgage-grader-revolutionary-or-just-one-more-marketing-widget\/","url_meta":{"origin":3366,"position":0},"title":"Mortgage Grader: Revolutionary or Just One More Marketing Widget?","author":"Brian Brady","date":"November 1, 2007","format":false,"excerpt":"Mortgage Grader is a consumer-operated, automated underwriting system. Jeff Lazerson, its founder, has been working on this idea for 3-4 years. It was released this summer. Consumers enter information and are issued an approval. The mortgage grading engine mashes up various automated underwriting systems (FNMA Desktop Originator, proprietary sub-prime engines,\u2026","rel":"","context":"In "Disintermediation"","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":18696,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/18696\/lenders-can-help-realtors-get-offers-accepted-in-a-competitive-market\/","url_meta":{"origin":3366,"position":1},"title":"Lenders can help Realtors get offers accepted in a competitive market","author":"Brian Brady","date":"April 14, 2022","format":false,"excerpt":"Most buyers find themselves in a multiple offer situation in today's market.\u00a0 While the highest price often wins the home, other factors come into play--some buyers are waiving appraisal, loan, and even inspection contingencies.\u00a0 Selling agents who want to protect their buyers, while affording them an \"edge\" against competing offers,\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":2962,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2962\/fully-clothed-in-the-valley-of-transparency\/","url_meta":{"origin":3366,"position":2},"title":"Fully-Clothed In The Valley Of Transparency","author":"Brian Brady","date":"April 13, 2008","format":false,"excerpt":"Originator: I'm being paid $7, 000 from the lender because you chose a rate of 6% Client: Got it. Cool, thanks for saving me money Originator: If you chose a rate of 5.5%, YOU would have to pay me my $7,000 Happy Client: Understood. I'm down. Let's roll with the\u2026","rel":"","context":"In "Disintermediation"","block_context":{"text":"Disintermediation","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/disintermediation\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":810,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/810\/a-realtors-guide-to-alien-lenders-2\/","url_meta":{"origin":3366,"position":3},"title":"A Realtor’s Guide to Alien Lenders","author":"Brian Brady","date":"December 26, 2006","format":false,"excerpt":"\"First you get the money, then you get the power, then you get the ....\" -Tony Montana in the movie, Scarface The professional Realtor has always helped a would be homebuyer by referring her to a credible financing source. That paradigm has shifted much in the past few years as\u2026","rel":"","context":"In "Enduring Interest"","block_context":{"text":"Enduring Interest","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/enduring-interest\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":967,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/967\/a-selfish-case-for-national-originator-licensing\/","url_meta":{"origin":3366,"position":4},"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. 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For those of you who aren't golf fans, let me rewind a few years.\u00a0 Tiger Woods was\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":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/3366","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\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=3366"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/3366\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=3366"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=3366"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=3366"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}