My understanding of the disclosure bit was that a few years back, mortgage brokers were cutting into banks mortgage lending business. Banks were overcharging and getting away with it, kinda like AT&T overcharging for phone service until they had competition.
The johns in govt (called lobbyists) for the banking industry paid the whores (known as congress people) to “protect” consumers via influence.
It was decided that mortgage brokerage industry would have to disclose their backdoor compensation through escrow on the closing statement marked “poc” BUT banks didn’t have to disclose their internal manipulation, thus protecting consumers.
It gave the illusion that banks didn’t charge fees, but brokers did. It was a lie.
Nobody wanted to admit that bank rates were higher because of this.
In reality it was the johns paying the whores to get their way and protect profits, it had nothing to do with consumer protection, it had to do with bank profits.
The mortgage broker industry was designed to offer consumers an alternate from being overcharged by banks and it worked for awhile. Then many mortgage brokers got carried away charging ridiculous fees to cluless, uneducated consumers and they got away with it.
Retail banks didn’t do subprime loans, but brokers did. It became a multi ring circus and a free for all without any govt intervention.
Brokers made banks become more competitive, and then brokers got greedy.
It is still possible to get better loans from a reasonable broker. From an average broker you will get overcharged. (Banks aren’t losing money by doing loans)
Many people are on the edge of getting a great loan, but don’t get help from a bank employee OR most brokers. They just get shoved into an FHA loan because it’s easy, not because it’s the best thing for the borrower.
I don’t care if banks show a higher rate with no fees and I disclose a lower rate with a fee.
