Wachovia earnings today fell dramatically 49 cents below expectations, an $8.9 Billion loss, and a cut of the dividend by 87%. Wachovia earnings release also mentioned they are no longer operating a mortgage wholesale lending division.

Wachovia is not the first bank to close the door on mortgage brokers. Bank of American did so a few months back as well.

There is no shortage of bad mortgage brokers out there and they come in all shapes and sizes with various personalities.

I thought with all the “specialized” ways of selection, it could be helpful to return to basics and discuss some of the obvious (and often forgotten) hallmarks of bad mortgage brokers.

A Florida mortgage broker found a way to rip-off people he never even met: the home seller! Mortgage broker greed reaches an all time high with this unconscionable scam.

So I was over checking my blog on ActiveRain and ran upon a Florida real estate agent who sparked this post. His comment said a buyer client was told to ask the seller for 6% in closing costs!

Mortgage brokers heard rare support from the nation’s top banking regulator, John M. Reich at the National Association of Mortgage Brokers Legislative & Regulatory Conference in Washington, D.C..

Some of the nice things said by Mr. Reich about mortgage brokers were:

A mortgage broker is the home loan consumer’s best choice. A mortgage broker locates and procures the funds. This means the mortgage broker must have multiple relationships with money sources.

Mortgage brokers can originate your loan but rely on wholesale lenders to provide the money to fund your loan. They go through a screening process to become an approved mortgage broker with the wholesale lender. Some mortgage lenders are very picky when selecting mortgage brokers and some let just about anyone in.

Eliminating yield spread premium starts by avoiding banks like the plague. Bank mortgage rates will always include their version of YPS since they have no legal duty to disclose it.

(In the banking world YSP is call service release premium. This “different” classification was the legal technicality or loophole the industry used to legally avoid consumer disclosure altogether.)

Locating the yield spread premium rip-off is virtually impossible except at closing on the settlement statement known as the HUD1 Settlement Statement. Of course, by then it’s too late!

Other non settlement statement mortgage disclosures specifically the Good Faith Estimate (the mortgage application disclosure) are useless for discovering yield spread premium overcharging since most brokers either never disclose or obfuscate the disclosure as you’ll see below.

Well I got an invitation to speak on a panel about blogging for mortgage and real estate professionals. Others on the panel include Todd Carpenter of REMBEX, the guys of Sellsius, and Kristal Kraft, a big Active Rain real estate blogger.