Beware the Predatory Lender

Predatory lenders are everywhere, and the process of financing or refinancing a home is complicated.  Most lenders are not going to teach you the tricks of the trade.  What they will do is overwhelm you with information about all the different types of loan programs and all the steps involved with getting approved for a loan.  You never really know if you have a level playing field!

 We spend a lot of time educating our buyers before we every really talk seriously about buying.  The following pages are going to 'give it to you in a nutshell'.  Education is vital if we are going to eliminate predatory lending practices. Let's get started. 

Some Definitions

Mortgage brokers hire loan officers to sell loans to consumers.  Mortgage brokers have accounts with wholesale lenders, who are the actual source of funds. 

Each day, the wholesale lenders will provide the mortgage brokers (and all their loan officers) with wholesale rate sheets.  The mortgage broker decides how much profit he/she wants to make on each loan and creates a retail rate sheet.  The loan officers sell from the retail rate sheet.  The difference between the wholesale rate and the retail rate AND closing fees make up the lender's profit margin.

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