Jumbo Mortgage Rates Scam

If the value of your home is above the conforming loan limit for your region of the country, Jumbo Mortgage Rates are a concern for you when refinancing your home. What you might not know is what has your broker salivating over closing and is the hidden markup found in nearly all Jumbo Mortgage Rates. Here are the basics you need to know about refinancing with Jumbo Mortgage Rates to help you avoid paying too much at closing and thousands of dollars every year in hidden markup.

Jumbo Mortgage Rates Basics

If the dollar amount of your home loan is above the conforming loan limit set each year by Fannie Mae and Freddie Mac you have a jumbo mortgage loan. This means that Fannie Mae and Freddie Mac won’t back the entire amount of your home loan. Because of this, Jumbo Mortgage Rates are typically higher than interest rates found on conforming home loans because the lender is assuming more risk of foreclosure.

What you need to know about Jumbo Mortgage Rates is while it’s true you may not be able to avoid this risk based markup by the lender, what you need to avoid at all costs is commission based markup by the broker. Did you know that according to the Secretary of Housing and Urban Development, homeowners in the United States, your neighbors, will overpay sixteen billion dollars this year alone due to commission based markup of their home loans? Most homeowners have never heard of the fee lenders pay for this markup known as Yield Spread Premium, let alone what it does to their monthly payments.

Avoiding Hidden Mortgage Markup

The good news is that you don’t have to be a personal finance guru to avoid unnecessary markup. I’m going to show you how to get as close to wholesale as possible when it comes to Jumbo Mortgage Rates. First of all, you’ll need a clear understanding of mortgage Yield Spread Premium (YSP). What is it? Simply put, YSP is a commission, fee, kickback, whatever you’d like to call it paid to the person arranging your loan for locking and closing with higher than necessary Jumbo Mortgage Rates.

I say higher than necessary because both the broker and the lender know the lowest interest rate your loan can be approved; however, the broker salivating in the corner knows that if he locks and closes higher he’ll get a commission from that lender for overcharging you. Here’s an example to illustrate how this works.

Yield Spread Premium in Action

Suppose for example, you are refinancing your California jumbo home loan for $500,000. Your broker charges you an origination fee for their work of 1.5% and quotes you at 6.5%. This means your monthly payment on a fixed-rate, thirty year home loan will be $3,160. This is a serious payment to meet every month. What you don’t know about this home loan is that the lender actually approved you for Jumbo Mortgage Rates at 6.0%, and the broker marked it up to 6.5% without telling you.

How can this be legal you ask? Changes to the RESPA laws in 2010 did not abolish Yield Spread Premium like many homeowners think, the law only requires brokers to disclose the fee they receive for it alongside the origination fee they are charging you. The problem is most brokers are very good at explaining away Yield Spread Premium. “Hey that fee isn’t coming out of your pocket, don’t worry about it.”

So what does this hidden insidious markup of Jumbo Mortgage Rates do to your monthly payments? If you had the jumbo mortgage rates you deserve at 6.0% your monthly payment on the same home loan would only be $2,997. That’s a difference $163 per month, $1,956 per year all because the broker took advantage of you. Don’t let it worry you too much, the good news today is that now that you know about Yield Spread Premium you can avoid paying for it.

You can learn more about avoiding this hidden markup of your Jumbo Mortgage Rates by checking out my free Underground Mortgage Refinancing Videos.
Here’s a quick sample that exposes the truth about this unnecessary commission known as Yield Spread Premium.

SunTrust Mortgage Rates a Good Deal?

If you’re looking at SunTrust Mortgage Rates for your next home loan there are several things you’ll want to know in order to avoid paying unnecessary markup and fees. Everyone wants a low rate for their home loan; however, paying junk fees can quickly sour the most attractive deals you find online. Here are several of my best mortgage tips to help you make an informed decision if SunTrust mortgage rates are right for your next home loan.

Can You Trust SunTrust Mortgage Rates?

SunTrust Mortgage is a fully-owned subsidiary of SunTrust Bank. Operating primarily out of the South-Eastern part of the country, they have offices from Florida to Washington DC. The mortgage division of SunTrust bank originates loans in 49 States but services loans in all 50 States. SunTrust mortgage can be found on the web at www.suntrustmortgage.com or by phone at 800.632.7928.

Like many of the retail loans offered by big banks, one of the undisclosed fees you should know about is called Service Release Premium. The problem with bank originated mortgage loans is that many of the laws protecting homeowners in your State do not apply because banks are regulated by the Federal Government and are therefore exempt from your State’s consumer protection laws. The problem with Federal mortgage regulation as it pertains to bank originated home loans is that that the Real Estate Settlement Procedures Act (RESPA) allows banks to generate extra revenue by jacking up your interest rate without telling you. Unless you compare the banks interest rates to wholesale mortgage rates you’ll never know how much the bank could be overcharging you.

Bank Mortgage Loan Fees

Service Release Premium (SRP) is the revenue generated for the bank when they charge you higher than market interest rates. SunTrust mortgage rates are no different because they are bank originated and therefore exempt from RESPA and your State’s consumer protection laws. Banks generate this extra revenue (SRP) by selling your home loan with a higher than market interest rate to investors on the secondary market. There is protection built into the RESPA laws that requires mortgage brokers to disclose any fees they collect for marking up your mortgage loan; however, thanks to the Banking Lobby in the United States, SunTrust mortgage rates are exempt from this legislation.

Because of the loophole in consumer protection I recommend that people avoid banks and stick with local mortgage brokers where you’ll get full disclosure in black and white, especially with the 2010 RESPA law changes. As of 2010 mortgage brokers are required to disclose any fees they receive from the lender alongside any origination fee they charge you. This isn’t to say that many shady mortgage brokers will try and explain this fee away as insignificant because it’s being paid by the lender; however, after reading this article you’ll know better and will be able to avoid these shady brokers.

Wholesale Mortgage Rates

It is possible to get a wholesale mortgage rate for your home by finding the right broker. You can pay a one percent origination fee at closing and walk away with what’s known as a Par mortgage rate without paying points or junk fees. SunTrust mortgage rates are not par for reasons that we previously discussed. Banks simply do not offer their customers wholesale rates. Getting par mortgage rates for yourself is not as difficult as you might think; you don’t have to be a personal finance guru to pull it off, you simply need to find the right mortgage broker for the job.

SunTrust Mortgage Complaints

According to the Better Business Bureau, the BBB received a total of 199 complaints about SunTrust mortgage rates during a recent 36 month reporting period. Of the 199 complaints listed 95 were resolved last year. Do BBB ratings mean anything or are they little more than a form of commercial advertising? Complaints or not, the bottom line for getting the lowest possible mortgage is to find the right mortgage broker, not simply hope that SunTrust mortgage rates will give you a good deal.

You can learn more about SunTrust mortgage rates and getting a wholesale rate for your next home loan by checking out my free Underground Mortgage Videos.


Here’s a sample of what you’ll get for free today. This video shows why almost all of your neighbors pay too much for their home loans.