Wednesday, April 18, 2007


Cameron said...

Not sure if you're checking this still or not, but...

Do you know anything about Lenox Financial, the guy from all those radio ads?

That One Guy said...

No, not specifically. I don't listen to the station that runs the ad apparently. And I haven't heard of them in the mortgage circles here. I do know that there are many "companies" out there set up, but don't have lending licenses active under that entity.

Many use this tactic to disguise where their mortgage licenses are registered. I would be willing to bet that if they don't show up under the licensees as Lenox, they are licensed through Envision Lending group.

Not that that is a good thing or a bad thing - it just makes it difficult to track what is actually going on, and what entity is doing the brokering or lending.

That said, in general mortgage rates are EXTREMELY low right now, so if you are thinking of a mortgage move, now is a good time, if you qualify.

Make sure you get a Good Faith Estimate, at the BEGINNING of the process, and make sure it lists ALL BROKER FEES, including YSP, which is the money paid to the broker for selling you a spread between the wholesale rate and the rate you get. With low rates like this, they can sell you a 6% fixed rate, and make more than 2% from you on that rate. As reference, with today's rates, the wholesale rate (called PAR) is 5.375% (that is for a 30 year fixed, 720 credit score, 80% loan to value ratio). Selling you a 6% rate today would net the broker 2.5% of the loan amount. On a $150,000 loan, that's $3750 of income to the broker.

Again, neither good or bad, just make sure you're informed.

Hope that helps.

Cameron said...

The commercial has the CEO guy saying it's "the biggest no brainer in the history of the world" or something to that effect. Basically, they're selling no closing cost loans.

What's the difference between going through a broker and going straight to a Lending Tree type place for instance?