{"id":975,"date":"2007-01-31T05:26:33","date_gmt":"2007-01-31T12:26:33","guid":{"rendered":"http:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/?p=975"},"modified":"2007-01-31T05:26:33","modified_gmt":"2007-01-31T12:26:33","slug":"bank-relationships-vs-mortgage-brokers","status":"publish","type":"post","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/975\/bank-relationships-vs-mortgage-brokers\/","title":{"rendered":"Bank Relationships vs. Mortgage Brokers"},"content":{"rendered":"

Every property I have ever purchased has been with the help of a mortgage broker. After my recent trip, I have started to wonder why this is the case. The obvious answer is simply their access to cheaper capital. Brokers can secure rates 50 to 100 basis points (.5%-1%) lower than most local and national banks. Additionally, the terms tend to be more investor friendly, with longer amortization and no recourse. With all of these benefits, why would anyone consider going anywhere else?<\/p>\n

The answers lie in two things: Technology and Relationships. The easiest explanation is simple disintermediation through technology. The Internet has opened the mortgage world to investors by allowing them to search many national and local bank rates, as well as, look across the country for the most aggressive mortgage lenders. The time will come (probably very soon, if not already) when some forward thinking investor will provide a site that connects investors and lenders in the same way mortgage brokers do now (think Lending Tree for Commercial Loans). <\/p>\n

Additionally, looking at Brian Brady’s recent post, Interview: The XBroker<\/strong><\/a>, the industry seems poised for positive transparent change. This change will further allow disintermediation and provide investors unparalleled access lenders. Furthermore, increases in information will drive down pricing. I have consistently been quoted prices in the 1% (of loan value) range for broker services, which can be fairly steep as a percentage of closing cost when purchasing properties in the $500,000 to $1,000,000 range. I would love to see this come down to 50 to 75 basis points (sorry to the brokers out there, but business is business). <\/p>\n

The less obvious answer is relationship building. I probably mention that real estate is a relationship business in 90% of my post because I really believe this. This concept is no different when working with banks. The value of the relationship, however, is not apparent right away. Most banks have specific lending criteria and will only be able to offer certain terms based on their risk assessment model. This fact alone keeps mortgage brokers employed. What investors fail to realize, Read more<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Every property I have ever purchased has been with the help of a mortgage broker. After my recent trip, I have started to wonder why this is the case. The obvious answer is simply their access to cheaper capital. Brokers can secure rates 50 to 100 basis points (.5%-1%) lower than most local and national […]<\/p>\n","protected":false},"author":16,"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":[3,4,2,8,5],"tags":[],"class_list":{"0":"post-975","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-blogging","7":"category-disintermediation","8":"category-general","9":"category-investment","10":"category-real-estate","12":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":2485,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2485\/buying-countrywide-why-bank-of-america-is-the-wrong-buyer\/","url_meta":{"origin":975,"position":0},"title":"Buying Countrywide: Why Bank of America is the WRONG Buyer","author":"Brian Brady","date":"January 11, 2008","format":false,"excerpt":"Countrywide (CFC) has been acquired by Bank of America. This should come as no surprise to Bloodhound readers; we discovered the weakness at CFC last Spring and speculated about the price last Summer. Robert Kerr, Matt Heaton, and Bob Wilson, all Bloodhound readers, tipped me off to conjecture, asked all\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":2150,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2150\/mortgage-grader-revolutionary-or-just-one-more-marketing-widget\/","url_meta":{"origin":975,"position":1},"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":362,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/362\/zillownews-round-up\/","url_meta":{"origin":975,"position":2},"title":"ZillowNews round-up . . .","author":"Greg Swann","date":"September 21, 2006","format":false,"excerpt":"Under the Zillow: The Tax-man cometh... My two favorite bits, in two days of coverage: Lenderama doesn't need accuracy, he needs a Zillow-based tickler to stay in front of his clients.MyZillow allows you to make \"estimates\" of what a property is worth. The estimate takes Zillow's data and adjusts for\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1489,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1489\/tennessee-commission-rebate-ban-signed-into-law\/","url_meta":{"origin":975,"position":3},"title":"Tennessee commission rebate ban signed into law","author":"Greg Swann","date":"May 31, 2007","format":false,"excerpt":"From the the Nashville Tennessean:Gov. Phil Bredesen has signed a bill reinstating a ban on cash rebates for home sales and other real estate transactions, despite opposition from consumer advocates and federal antitrust officials. The bill signed late Wednesday reverses a decision made earlier this month by state regulators to\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":797,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/797\/cutting-out-middle-man-in-a-sale-might-cost-you\/","url_meta":{"origin":975,"position":4},"title":"Cutting out middle man in a sale might cost you","author":"Greg Swann","date":"December 22, 2006","format":false,"excerpt":"This is me in today's Arizona Republic (permanent link). \u00a0Cutting out middle man in a sale might cost you I've talked about disintermediation before, and surely it will come up again. Disintermediation in real estate is the idea that buyers and sellers can eliminate the middle man -- in this\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":2884,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2884\/zillowcoms-long-awaited-mortgage-lending-service-to-offer-anonymous-customized-loan-quotes-to-consumers-affording-loan-originators-the-opportunity-to-compete-transparently-for-free-mortgage-leads\/","url_meta":{"origin":975,"position":5},"title":"Zillow.com’s long-awaited mortgage lending service offers anonymous customized loan quotes to consumers, affording loan originators the opportunity to compete transparently for free mortgage leads","author":"Greg Swann","date":"April 2, 2008","format":false,"excerpt":"Seattle-based real estate start-up Zillow.com tonight releases its long-anticipated mortgage lending product. We've known for nearly a month that Zillow's offering would include working loan originators in some fashion. What becomes clear tonight is that Zillow will basically be acting as a hands-off intermediary between mortgage-seeking clients and loan originators.\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":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/975","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\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=975"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/975\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=975"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=975"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=975"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}