+I'd like to start off with an admission.  I understand that telling you will automatically put me in the same league with child molestors, Ted Haggard (before the HBO documentary aired and you went from hating him to just feeling sorry for him), Catholic Priests (oh - mentioned that one already), that fat bully that beat you up and pulled your pants down in front of the whole school, and the genetically engineered mutated spawn of Rush Limbaugh and Sean Hannity that the GOP has been hiding in a secret lair waiting to unleash on the World. 

Yes, friends, I am a mortgage broker. (pause for alarmed gasps and groans of disapproval).  I could write for hours trying to convince you that I'm one of the good ones (which I am) that has my clients best interests at heart.  You wouldn't - and more importantly SHOULDN'T believe me.  The best, and in my opinion the only way to make sure that your mortgage broker is one of the good ones (and there are still a lot of good ones left) is to get a referral from someone you trust who has worked with one.  You can find this information on the NMLS (National Mortgage Licensing System) at www.stateregulatoryregistry.org  If you don't want a breakdown of how the mortgage broker/banker system works - skip ahead to the paragraph titled HERE'S WHERE THE BULLSHIT BEGINS.

Here's a quick breakdown on how mortgage brokers work.  We have relationships with banks who offer us a "wholesale rate" that is not available to the general public if they were to go into the bank (if that bank even has a retail presence - which many of them do not).  The reason is that they don't have to pay us a salary or benefits, etc.   So we compile all of your personal information, pull a credit report, obtain an appraisal, etc. and we "shop" your loan to our lenders.  And until about six months ago - we would find a deal at Lender A that no one else could match.  Some lenders wanted to "buy" the market and provided us pricing incentives that allowed us to get a better rate than we could at Lender B or C or ...  Sometimes, your loan only fit into a category that was a specialty at Lender B - and no one could even touch their rate.  But then the credit crisis hit - and everyone stopped lending on everything but the most vanilla loans.  You not only had to have GREAT credit, a bunch of equity in your home, a very low debt to income ratio and a bunch of other factors we've never had to consider before.   Stated income loans were a thing of the past.  And while everyone cheers that as a great thing - and in it's old form it is good that it's dead - it basically means that all self employed people who claims write off's for their business can not buy or refianance a home, because self employed people are held to a different standard for income calculation and it's rare that they would qualify.  Even though the default rate of self employed people who had good credit and used stated income to get their loan was as low as any out there. 

In the beginning of this year things started to slowly thaw out - and with the Fed agreeing ot buy mortgage bonds rates began to drop dramatically.   Lenders were taking in applications at a rate not seen since the refinance boom of 2003.  But they didn't hire any additional staff.  Most were staffed for 40-100 new files per day - and now they were taking in 500-1000+.  But they claimed that the boom wouldn't last - and they didn't want to lay anyone off.  The Fed promised to continue their bond buying in order to keep rates down at least through the end of the year - if not longer.  Unfortunately - the lenders didn't agree or care.  Turn times became increasingly long.  Some lenders ran out of money in their bank lines and couldn't fund loans.  They folded, meaning the remaining lenders picked up even more files, increasing their turn times.  Everyone was at capacity. 

HERE IS WHERE THE BULLSHIT BEGINS!  Every day we get ratesheets showing what the "market" rates are for that day.  We compare four or five - to determine  who's offering the best deal so you can get your customers the best rates available.  Unfortunately - all the rate sheets started looking increasingly similar.  Lender A, B, C, and D, were all virtually the same.  Lenders SUPPOSEDLY determine rates based on either the price of the 10 year treasury bond, or what MBS (mortgage backed securities) are selling.  As the prices of these instruments go up - rates should go down.  As their prices fall - rates do go up (anyone see where this is going?)    One day the bond had an extraordinarily good day, as did the MBS.  We're talking a once in ten years good day.  Normally - a good day for the 10 year bond would be 40 or 50 points, causing a .25% drop in rates.  But this day the bond was up over 250 points.   We were all calling our clients, telling them to expect rates in the low 4%'s.  President Obama's plan for lower rates was going to work!!!  But then the banks (every single slimy one of them) decided it would be better to just keep the profit and not pass it on to the public.  Rates dropped a paltry .3% - when they should have dropped 1.3%.  They didn't even deny being in collusion with one another.  They were at capacity - so there was no need to allow people to get fixed rates in the high 3% range.  5% would be good enough.  When we complained - they said if you don't like it  - leave the industry.   They weren't going to change it.  

The next day, they all came out with their rate sheets.  No difference in rates.  They really were just going to keep all that gain.  Instead of making 1% on your loan - they would make 3% - and they don't have do disclose that to you AT ALL.   Now - here's where it get's really shitty.  That next day - the bond market has a very small slip - down 31.  Lenders all announce immediate price changes for the worse - effective immediately.  They bump rates by a quarter percent.  So this goes on, day after day.  Good days in the market are met with no help for the consumer. Bad days are immediately  met with rate increases.  They don't make any headway in decreasing turn times.   People actually trying to buy a home are having to do 30 and 60 day extensions.  The people who can refinance that should be getting 3.8 are stuck with 5.  Hey - the bank NEEDS that money.  We should just be glad their doors are open.  Hey - banks - FUCK YOU!

Yesterday - the bond market reacted to the news that the fed would try to keep rates low by purchasing bonds so that the banks could lower rates and hire more people knowing this wasn't temporary.   The bond market had a record day - up over 400 points.  I figured they would HAVE to give us some rate relief.  We should see at least 4.25% available on this morning's rate sheet.   NOPE - MORE FUCK YOU FROM THE BANKS.  Most lenders dropped rates .25% - FOR A 400+ point rally?  Some even RAISED THEIR FUCKING RATES!  So now those fuckers are making 4% on the loans locked that day - and the consumer suffers.  They say to just be glad their doors are open. (as they re-do their luxury executive washroom).  And to top it all off - we have a 20 point loss in the market this morning - and the rotten greedy bastards raise rates by .25 to .3%   OK - we have a 400 point rally - we get .25%.  We lose 30 points - rates go up .25%??????

Greedy bankers, there is a bullseye painted on your forehead - and the populist revolution is coming for you.  Keep doing this type of crap you pieces of garbage - and when the doors are ripped from your bank and you are pulled out of your luxury office by an angry mob - just remember you did it to your fucking selves!