AgentMortgage

Good luck trying to negotiate mortgage broker’s fee

New rules prevent loan originators from lowering their compensation

"I refinanced last year and negotiated the fee I paid the mortgage broker. Now, I want to refinance again to take advantage of lower rates, but my broker tells me that the arrangement we had last time is no longer possible under new rules. He says that his fee is set beforehand and that there is no way he can change it. That fee would be twice as much as I paid him last time, and may change my mind about doing the deal. Is he being straight with me?" Yes, the broker is being straight with you. The Federal Reserve amended Truth in Lending (TIL) last year to change the ways in which loan originators (mortgage brokers and loan officers, henceforth LOs) could be compensated. More changes may be coming when the new Bureau of Consumer Financial Protection authorized by Dodd-Frank implements similar provisions of that law. Purpose and scope of the new rules The purpose of the TIL amendments was to eliminate the ability of LOs to use their greater knowledge to take adva...