Imagine if you are a business (bank) selling lemons (loans). You have employees (Loan officers) who prepare the lemons (loans). One day you decidedyou want more business (loans) so you advertise in the paper for salesmen (mortgage brokers) to sell your lemons (loans) in exchange for a fee (yield spread premium). That way it would be cheaper than hiring more employees (loan officers).
My advice, why not get off you rear and drive and talk to bankers. . . .if you save 1.5% on a $400,000 home annually. . .well do the math.
Would you pay an extra 1.5% on your car loan if I drove you to a car lot to introduce you to the salesman and I kept the 1.5%?
Now imagine if you made 3-5 percent of a neg-am loan of $400,000 or an adjustable ARM as a broker? Can you see why all these brokers blew their money on cars, whores and cocaine 🙂 Imagine if you did 6 deals a month on refis?
