HARP 2.0......Who is being helped?

[Baoxiaodao]

Direct link:  http://www.americanbanker.com/issues/177_58/wells-fargo-caps-loan-value-ratio-third-party-lenders-1047789-1.html

 

A new report from Amherst Securities found that some megabanks are making 3.5 to 7 points of profit on HARP 2.0 loans, in part because they are charging higher than market rates for the loans.

 

On industry advisor close to the issue, and who spoke under the condition his name not be used, said on a $200,000 loan (for example) some lenders have the ability to earn $10,000 in profit per loan. "They can earn up to 10 points," he said, but that profit margin only applies to loans that are already in their servicing portfolio.

 

The advisor noted that Wells is not doing anything wrong – but simply sees a huge market opportunity to earn a ton of money.