Most of these foreclosures are Adjustable Rate Mortgages (ARM) and options ARMs that are going from a fixed rate into a rate that will make you nauseous. I remember back in 2004 when I worked for this mortgage brokerage company and option ARM program from Washington Mutual was this hot item "SELL THIS!". I didn't like it at all! They gave you all these flayers and booklets on "stability" which looked scary to me. There was no limit on cash out as long as you fit the LTV requirements and I think there was No minimum FICO scores...crazy? right! That program was selling like it was going out of style!
The thing that was totally against my spirit or my moral was the pre-payment penalties and wholesale points paid to broker. The program had "No pre payment penality" option but it paid 0% to 0.50% rebate to brokers.... so what did most brokers do? Sell the 3 year pre-pay penalty so they could make 2% rebate. I was told to do the same, so I quit!
I was never a good sales person for these residential brokers...I could barely hit the 1% rebate mark. I originated loans for customers like they were my family... I just couldn't resist giving them the lowest rates. It was too easy :-)
