Update:  Loan Officers have been granted a until April 5th.

Last night as I rolled over in bed, nearly crushing Diego, my beloved Chihuahua, I was awakened by a man saying sweet nothings in my ear.  My dear husband?  Nope. Uncle Sam.  And he is lurking around everywhere and into everything.

Today, April Fool’s Day, our government has decided to allow all of the home owners in the U. S. to refinance their mortgages to the current 30 year fixed rate at today’s appraised value.  FHA is reversing their decision on the “you’ve got to be kidding me” monthly mortgage insurance increase, the REO banks will allow agents to use any title company they would like (press one if you agree), with no penalty, and banks will begin lending money to small businesses.

But the reality is that the real estate world will again be rocked by yet another explosion of mortgage changes effective, when else but April 1st.  As of today, the loan officer compensation bill will penalize home buyers for the sins committed during 2005 to 2007 for loans and incentives that no longer exist.  We have all been brought up to believe that it is impolite to ask what people make in their profession.  But the mortgage industry is all about transparency with the income of mortgage brokers disclosed on settlement statements since 1998.  Our industry is just short of placing our commissions in neon lights over our cubicles.   Now, courtesy of Frank-Dodd and the Fed, mortgage lenders can only make a set amount, that cannot vary per loan, whether it be $400,000 or $50,000, FHA, VA or conventional.

The regulations on the loan officer compensation bill are complex, convoluted, and unfocused.  The maze of doubletalk by trying to follow the logic has pushed many of us to rethink the benefits of flipping burgers at Burger King.

Keep in mind, the American tax payers are guaranteeing virtually every home loan.  Yet, no one can answer a simple question:  How much do the banks make on an individual mortgage?  What are the total amounts, the one, and big, all-inclusive figure?   Is there no response because the L.O. compensation is yet another maneuver to funnel more money back to the big boy banks? It’s a good thing the American Public is good looking because we couldn’t possible understand the intricate details of how banks make money on mortgages.   How about whispering it to Diego and we will all listen in.  Think about it.  This is no joke. Your industry could be next.

Diane Gerdes