The XBroker - Latest Comments in Risk Based Pricing How Mortgage Rates are Determined. Credit Scores and History

Re: Risk Based Pricing How Mortgage Rates are Determined. Credit Scores and History

Surviving A Recession — Thu, 05 Mar 2009 08:27:37 -0000

Wow! That was by far one of the most informative articles i have ever read on how mortgage rates are set. This is great stuff to know when you are negotiating a mortgage. I am assuming that this type of information is leveraged by mortgage brokers to get paid? Knowing this would enable you to negotiate fees the broker wants to charge. Fantastic information.

Re: Risk Based Pricing How Mortgage Rates are Determined. Credit Scores and History

AustinSurferDude — Sun, 31 Aug 2008 10:57:27 -0000

I agree with one of the previous comments on educating the public. We need much greater transparency in the mortgage and consumer credit rating markets. Without such, we will continue to see huge agency costs that tend to penalize the less educated consumers which is highly correlated with the lower income borrowers, who, arguably, do not need these additional agency costs or penalties. I think a higher degree of transparency would definitely have helped in the recent credit crisis, however I would also argue consumers will buy whatever products are presented with little regard to longer term consequences (such as the case with the terrible ARM products put out there)...as 80% of consumers cannot rationalize well time value of money or future costs at the point of consideration and decision.

If Congress didn't suck so badly, they could impose better transparency guidelines (note that I'm not saying regulate, but rather ensure transparency, as I believe the market should self-regulate and allow broad risk profiles for investors). I would argue the majority of consumers cannot clearly articulate between interest rate and effective APR that is shown on every mortgage product.

Re: Risk Based Pricing How Mortgage Rates are Determined. Credit Scores and History

Rob Hahn — Tue, 29 Jul 2008 20:04:41 -0000

Jeff...

This should be perma-pinned somewhere on your site and various other sites.

In fact, this should be required reading for all graduating high school students.

I truly believe that if you took this whole series and turned it into an easy-to-read, easy-to-understand set of videos or books, it would be a valuable public service.

-rsh

Re: Risk Based Pricing How Mortgage Rates are Determined. Credit Scores and History

California Mortgage Home Loan — Tue, 15 Jul 2008 16:51:25 -0000

While RBP seems complicated, it's the best thing that could have come out of the current mortgage crisis.