Pulaski

Many of your posts leave me wondering whether you are extraordinarily unlucky or if you just make a lot a bad choices in life.

mrken30

I have had good luck with mortgages.

Maybe a bit of both. Maybe one follows the other. Exploding washers and rogue contractors are the worst choices. I have some good luck also. I kept my job when the rest of the team was laid off, I have been unemployed for 2 days in my working life.

I tend to analyze things in too much depth which causes me issues when I find out things have been done wrong.

Giantaxe

Generally, I agree with that sentiment. But.... this is Wells Fargo we are talking about. Given their track record of opening fraudulent accounts and unwanted insurance products, I think their current commission structure is very relevant. Oh, and these as well, if true:

https://www.propublica.org/article/h...e-of-customers

http://www.sfchronicle.com/business/...d-11101574.php

BEVS

OK guys.

I've seen the closed thread which could have been a helpful topic if it had not been killed off by un-necessary comments and I'm now looking at this one.

The title of this thread is Wells Fargo Mortgage Commissions.

I'm short on patience having read the last one. Keep this thread to that topic.

mrken30

Everyone has to earn a living, all brokers get commission, but is it good that a broker pushes a particular policy on you because he gets more commission. It may be cheaper, but it may not be a better product. There are multiple stories like this in the news and on the internet.

BEVS

To be clear for everyone looking in because I am still not happy.

That has not happened here from any of our regular posters has it.

This is you now berating brokers for the industry operating policies. If you do not wish to pay commissions then don't use them. Or ensure you do due diligence to ensure what you buy fits your needs and requirements.

Keep thisonly to the name given to the thread. Wells Fargo commissions .

Pulaski

To be clear, almost all mortgages in the US are sold by the bank/broker that provided the mortgage to the homeowner. The price that the bank gets for your mortgage is a function of the difference between the interest rate the borrower pays and the rate on ten year US treasuries (an average mortgage only lasts about ten years, mostly because the borrower sells the home and the mortgage is paid off from the sale proceeds). If investors will buy US Treasury bonds paying 3% they might be willing to invest in high quality mortgage backed securities paying 4%, so if you borrow $100k and pay 5% that is the same as $125k at 4%. Given those numbers a $100k mortgage would be worth $125k!

The difference between sales price and amount lent for high quality mortgages is going to be quite large - tens of thousands of dollars in most cases, and that is how mortgage companies make money - all of them, not just Wells Fargo. From that price the banks have to pay their overheads and expenses, and to be clear, not all of it goes to the banker/broker that makes the original loan, a tidy chunk goes to the Wall St bank that creates the mortgage backed securities and sells them to investors. .... Athough this hasn't been happening in recent years and most of the mortgages in the US for the past decade have ended up owned by the US government through two mortgage agencies known as Fannie Mae (FNMA) and Freddie Mac (FHLMC).

But if Wells Fargo, or any other bank, chooses to share a fairly small part of the profit they make from selling a mortgage by way of a commission to the individual who worked with the borrower shouldn't IMO be a great concern, or indeed, any concern at all.

mrken30

It's not even differences between different banks, it is differences between different products a single bank sells. For instance I thought I was getting a better deal because I was forced to take an escrow. The broker told me that I could just remove the escrow after a year, however that was not the case and I am stuck with it for the term. Yes the broker got a little bit more commission for selling that product, was it in the customers best interest? That depends on the customer.

If a bank operates same commission for all products , this problem goes away. However they then try and sell you home insurance and all the other products that go with buying a house. Not sure if WF also does title insurance.

For some reason this seems to be quite an emotional topic for some people. Commission is part of everyday life, cars, TVs (excluding Best Buy), houses,...

Pulaski

Hmmm. .... Bad choice, or extraordinarily unlucky?

mrken30

That again, It's a 30 year mortgage just over 3% is that good or bad? Taken out in 2011.

Pulaski

I have no idea why you're complaining. I think you just like to complain!

ian-mstm

A 30-year mortgage at "just over 3%" and he doesn't know whether or not it's good or bad? As Bugs Bunny used to say...


Ian

mrken30

Someone was saying did I make a bad choice. I don't think so, but still annoying having an escrow account

ian-mstm

Why don't you renegotiate the terms or take your business elsewhere? If I've learned anything in life, it's that nothing is permanent.

Ian

mrken30

They won't renegotiate, mortgage rates are higher than 3% now and the cost fact of the annoyance is not worth the cost of a refi. I could pay it off, but 3% is cheap money after tax deduction. I would rather have that money in 401k/ cash. I think it would be bad decision to refi just because I am forced to have an escrow. My point was that sometimes a broker will make a choice for you that you don't necessarily want, just to make some more commission.

Like a car dealer selling you window etchings. Would you really pull out of the deal for $300 window etchings?