In doing some research on the Code of Ethics, I found the following information listed on the RE/MAX International website: "The REALTOR you hire adheres to a strict Code of Ethics and professionalism while protecting ownership of property." "In the U.S., all of our agents are members of their local REALTOR board and uphold the associated strict Code of Ethics."
As stated earlier, REALTOR Magazine provided the following information in their article regarding mortgage fees: "People should ask their broker how much they're making, including yield spread premiums and direct fees, and if it's over $2,000 they should question why." Please keep this information in mind when reviewing Scott Veerkamp's "switching" technique.
Likewise, I am forwarding information from CNN Money.com regarding junk fees. The article is entitled: "The bunk behind junk closing fees." "Mortgage brokers and their many "fees"--sometimes not related to any actual service performed by a broker."
The article has a list of names that brokers use for various junk fees. Please review this statement contained in the article: "The long list of names that fees go by ( in addition to processing and administration charges, Aquila residents were hit with application, commitment, courier, document prep, origination and underwriting fees) suggests that specific things were done to earn them."
"Actually, says University of Minnesota law professor Prentiss Cox, a former head of the Minnesota attorney general's consumer division, most all of these fees end up in lender or broker coffers regardless of what a HUD-1 says: They should just call them "Pluto research fees." "They're just making this stuff up."
The quote above was taken from the CNN Money.com article. Obviously, Mr. Cox is very specific about his statement on junk fees. I agree with him when he says: "They're just making this stuff up." In fact, "Pluto research fees" is a perfect description for excessive and unnecessary junk fees. Clearly, these fees are not in the best interest of the client.
Please note: "Going In and Going Out" is a term I use to describe the mortgage transaction I had with Scott Veerkamp. This term is synonymous with "Bait and Switch." Please take a moment to review the following explanation...
The "Going In" phase typically represents a statement from Scott's website or his affiliation with NAR. As I mentioned earlier, this statement is often used as "BAIT."
The "Going Out" phase shows the financial result for his client. As you might expect, this is where the "SWITCH" takes place. Please review the following "Going In and Going Out" examples... ( * indicates junk fee / "Pluto fee" )
Group A: 1. "Serving Others First" going in---and a $500 "processing fee" going out.* 2. "Keeping the interest of my clients above all else" going in---and a $960 "application fee" going out.* 3. "Dedicated to providing the finest service possible" going in---and a $150 "underwriting fee" from the lender going out.* 4. Scott describes himself as a "Super Servant" going in---and Scott "blindsides" his client with a $4,799 "Yield Spread Premium" going out. 5. "Protecting and promoting the interest of his client" going in---and a $409 "administration fee" from the lender going out.* 6. Following the "Golden Rule" going in--and $1,920 in "discount points" going out.* 7. "Someone You Can Trust" (public awareness campaign) going in---and thirteen examples of "deception" and "financial harm" going out.
Group B: 8. "Be truthful in all communications with the public" going in---and Scott collects $6,239 in "secret bonus payments" going out. 9. "Fairness and high integrity" going in---and a $35 "electronic filing fee" going out.* 10. "We go the extra mile to help you achieve your goals" going in---and a $425 "administration fee" from the lender going out.* 11. "We'll make your home buying or selling experience a pleasant one" going in---and a $250 "document preparation" fee going out.* 12. "You can trust our REALTORS to always put your interest first and foremost" going in---and a $1,440 "Yield Spread Premium" going out. 13. "You need a professional team that understands the industry and is positioned to stay ahead of the game" going in---and a $50 "courier fee" going out.* 14. "We will do our very best to help you get the lowest interest rates possible at the lowest possible price" going in---and a whopping $10,938 in "Pluto fees" and kickbacks going out.
Hopefully, this information will give you a better understanding of Scott's "switching" technique. He consistently does the opposite of what he says he is going to do. As you can see, he often receives a large financial sum for "steering" people into high cost loans. Unfortunately, these large financial gains are coming at the expense of the public.
In summary: The examples above total $10,938 in junk fees and kickbacks, or $5,469 per loan. Scott collected $6,239 in Yield Spread Premium from the lender. As discussed earlier, Senator Merkley says Yield Spread Premium has turned the home mortgage industry into a SCAM. Nonetheless, Scott describes this scenario as: "Keeping the interest of his clients above all else."
