Crowdsourcing loan rates

[Di Ye]

Hey everyone - new to BiggerPockets and excited to be here. This is my first question ever posted here - is there something out there to crowdsource loan rates people are getting? I spoke a loan originator and they mentioned how they calculate the rates on the back end, but retail investors don't have access until they do a hard credit check (which is not ideal). If anyone wants to chat about loan origination, I think I picked up a couple things along the way and happy to share what I know. It's mostly around rate charts, commission structures, and how they sell off the loans to the gov't.

[Kevin Romines]

What questions do you have? 

We are a mortgage banker that doesn't service any of our loans, meaning we sell the completed loan off to the final investor and they service the loan, meaning collect the monthly payments and disburse those payments to the owners of the loan. The owners of the loan can be institutions and various investors on Wall Street. You could buy shares of MBS, or Mortgage Backed Securities as part of your investment pool.

We underwrite the majority of loans we close, however we also have correspondent lenders that will underwrite certain types of loans, but we fund the loans on our warehouse lines of credit and sell the completed loan off to the same investor that underwrote it for us. 

Even if the correspondent lender underwrites the loan, we are fully responsible to assure that loan meets both the institutional underwriting guidelines (Fannie Mae / Freddie Mac / FHA / USDA / VA) as well as the investors guidelines. If it was determined by the investor in an audit after closing and sell off to the investor, that the loan didn't meet the guidelines, then our company would be forced to buy it back, and put it back on our warehouse line of credit. So in all ways, my company is responsible for that loan. Our warehouse lenders do not want to see us carrying a loan on the warehouse lines and could penalize us for doing so. So any company structured like ours will have the same mandates we have.

As far as pricing or interest rates go, all of our investors publish rates daily, and also adjustments through out the day, based on what is happening on Wall Street and other major economic news in the US as well as in other countries. Our pricing to you the consumer is built on top of the raw pricing from our investors. The whole industry basically works in that way. 

I hope this helps shed some light on how the industry works?