Recently Congress enacted laws that were supposed to provide Transparency with respect to the fees that lenders charge. In fact the comparison between mortgage brokers and banks are totally different. Mortgage brokers are required to disclose every penny that they are making and must commit to this borrower without any margin for error. Part of the income revenue they receive is known as Yield spread. This defers the "up front" capital that a buyer would have to have to cover closing fees as some of the fees had been payable to the broker directly from the lender. When calculating the APR brokers must consider this YSP into the equation. Therefore the only accurate comparison that could be made would be by comparing mortgage broker to mortgage broker. The banks and companies that close under their own name and later sell these loans do not have to disclose their profit and do not figure this  hidden profit into the equation when calculating APR. When you realize that the banks are borrowing money from the feds at  .25% and less and lending over 5%, their return on their money is in the 2500% range. If they had to calculate their APR the same way the mortgage broker did than their APR would be 2500% or higher.

Recently I reviewed a Good Faith Estimate that was sent to one of my clients by one of the BIG Three Banks(Those labeled "too big to fail") that had estimates shown in ranges from$500-$1800 in several categories on the good faith estimate. How is this accurate? Lastly, if a lender owns a foreclosure and you are interested in buying it it is ILLEGAL for the lender to require you use their services. In South Carolina you have the freedom of choice  in selecting your insurance company, attorney and how you wish to finance this property. If you feel you are being pushed into  a "no choice" situation feel free to contact South Carolina Consumer Affairs, the Federal Reserve or the Comptroller of Currency.

If you have any questions in the home buying process or the financial aspects of this transaction I will be more than happy to answer these questions and address your concerns. I truly believe that my 30 years experience in these fields more than qualifies us to do so. I always encourage you to explore your options. This is the biggest investment you will make in a long time . I will see to it that your experience is a pleasant an professional experience.

Gary J. Heinecke

President

CRS, GRI, CREA, BIC