I’ve been a mortgage loan officer for 5 years. I am only telling you this story of my fraud scheme because it is such a sweet deal. Sure, I’ll keep doing it until it is listed in papers across the country as “The Next Big Mortgage Fraud Scheme”. I may lay sleepless at night worrying about getting caught, but do you think I am where I am now because I am honest? That I want to jump off of this gravy train? Surely you jest!
Now pull up a chair and let me tell you how you can pay off your 30 year mortgage in 20 years. Yes, the one you can barely afford as it is. It won’t cost you a penny-you will even get some cash back at closing! You mentioned you would love to remodel your kitchen didn’t you?
Don’t worry, I’ll take care of all the small details, yes, just sign right on this line; and initial here; and here-oh one more place-you know how picky those lenders can be!
What I won’t tell you is that we are splitting the commission that the lender is paying me for this refinance-it is a yield spread premium (YSP). The new lender loves me because I am originating a loan with a higher rate and putting money in everyones’ pocket. It sounds illegal doesn’t it? Well I don’t see how it is illegal, it is paid out in plain sight right there at closing! Besides you can plead ignorance if we get investigated!
My web of lies and scams actually begin when I tell you that we can refinance you AGAIN in a few months with another lender! Sure it may cost the original lender thousands of dollars in commission, but isn’t that what I am, I mean we are here for? Remember that fancy stainless steel oven you wanted? We can even do this every 3 months in this “loan program”. No, we will never use the same lender twice-no one will ever know! The only people who know about this are are the people making money and I’ll never tell!
I know it is a pain to sign all of these papers every 3 months, but we have to keep from paying the YSP recapture. Leave the legal jargon to me, just go look at those fancy ovens.
I also won’t tell you that I am getting 3% of the loan each time on this YSP-wasn’t your house appraised for $400,000? Ahhh, I’ll make $24,000 smackaroos per year off of you! It is heaven sent that you are not the only client of mine that I do this for!
Well, it looks like our time is up Ed, I see my 2:30 is here to sign some important papers. It was nice doing “business” with you, tell Sally I said hello and I will see you again in 3 months!