whoa…a lot of resentment and opinions about mortgage industry on a thread that I really just posted to keep track of my progress.

  BTW, I was a wholesaler. My clients were brokers, but I wasn't involved in selling any mortgages to anyone. My job was to establish and maintain relationship with the brokers and correspondent lenders. My job was exactly like those of a mutual fund wholesaler, except my product was mortgages and I didn't have a company credit card. (this is where I want to end up eventually after 5-7 years.)   As far as my qualifications for selling, I think my track record will show that I do a decent job. As far as my qualifications for offering investment advices, I don't have any yet because I'm just starting. But to be given a chance to learn, I have plenty. Besides the work experience, I graduated top 10 in my high school class with far above average test score. I graduated from an excellent 4-yr college, one of PAC-10 schools in California, and I did well enough so that my parents didn't have to pay a single dollar for my college education. I believe that education is a personal choice, so i won't make the mistake of judging someone based on which school they went to and what kind of scores they got on a standardized test. However, I'm confident that my credentials will not be dimmed by many others, anywhere in the world I go.   I know exactly how you feel and understand your resentment, iceco1d, because I felt the same about the brokers that used to run call centers using bunch of high school drop-outs to solicit clients and obtain confidential information from them. A LOT of mortgage/real estate brokers/agents don't even have a 4-yr degree(which by the way should be a minimum requirement for getting any type of license).   I don't want to make excuses for myself, but I've had some bad luck in the past year. Offered a job twice in the banking industry and took the offer on both times, but neither worked out. One of the offers were suspended a week before I was supposed to start because of a hiring freeze. And this was after 2 months of background check. Other firm's entire division shut down due to take-over/merger. What can I say??? This whole time I'm supporting my parents and paying for my sister's college education. In the end, I'm the one that's stuck with the bill, but how many 28 year olds can say that they bought their parents a car and paid for their sister's masters degree? Not many. I'm now doing whatever the HELL I CAN to get back to where I need to be. I got a plan to start a family soon and that's my #1 priority at this time.  

[quote=iceco1d]GG, GR…My “opinion” post wasn’t serious.  I’m not that much of a d|ck.  Usually. 

  There certainly can be unethical advisors, as there can be unethical people in any profession.  My point, was that the mortgage industry, quite obviously, has/had more than their fair share such characters.  It was also my point, that I'm uneasy about the influx of those people into our industry - as it seems that being a 'financial advisor' is one of the top alternate career choices for ex-mortgage brokers/salespeople.    Scary.  These are some of the same jerkoffs that you'll see selling 15 year surrender EIAs, and dropping B-share tickets up to the firm maximum.  They will be the guys that throw together shit-bag portfolios of funds, from whatever wholesaler takes them out to dinner the most.  These will be the same guys that call their A-share buying clients every 3 or 4 years to tell them about the "new, better fund, from this other fund family" their clients will "like better."  Or selling A shares, with the intention of moving clients to a fee platform 3 years later.  And then, no less, when their poor clients get to retirement, they will set them up with a handy-dandy 5% withdrawal rate on their portfolio of Growth & Income mutual funds, and that will be their "income planning."  They will be busy gathering assets, churning old A-shares, whatever.    With the baby boomers retiring.  With SS in shambles.  With the retirement burden falling on individuals.  We need more competent people in this business.  The mortgage talent pool (no play on words intended) isn't where I'd fish for those people (yes, there are diamonds in the rough).   My gosh - so you explained these loans to people.  Whoopy.  You couldn't see that these effing loans were ridiculous?  That these people were going to get blown up?    That's like me explaining how a ROTH IRA works to a prospect, but ignoring the fact that they have $30K in credit card debt @ 22% interest, and still letting them DCA their spare money into their ROTH, instead of paying down their credit.  "But John Q. Public, I explained how the ROTH works, and how the investments work...sure I could tell that investing money prior to paying down high interest debt wasn't in your best interest and would probably screw you over long-term...but I explained it to you!  You made the final decision!"   I agree with your stance on the Community Reinvestment Act.   However, you need to realize - the 'mortgage guys' had one helluva role in this.  Most certainly the BIGGEST role.  Wall street played its part.  However, they are second to blame.  Notice, I said THEY, and not US.  Those of US, on this board, aren't investment bankers.  We are FAs, or FCs/FRs/insurance agents, whatever, but we are not investment bankers, and WE didn't do this.         [/quote]

How is a 15 year surrender EIA worse than a 35 year surrender 401K?

iceco1d:

[quote=GlengarryGlenRoss]I see you’re a nightowl as well.  I agree with most of your points and would like to think I’m one of the diamonds in the rough you referred to.  I suppose you feel a bit like I did when our industry saw an influx of car salesmen and other types as the real estate boom took off, so I’ll give you the benefit of the doubt and I can appreciate your perspective.

To defend myself briefly, the worst products I ever sold were subprime ARMS.  If I didn’t, someone else would but at least I know my clients would have fully understood what they were getting into.  I can’t force them to get their credit etc., in order though I surely advised them to do just that.  Unfortunately the loss of equity in many homes prevented a lot of people from refinancing out of the ARM prior to the adjustments kicking and the perfect storm came rolling along. 

In any case, I’m still studying for my 66 and then 7 before I officially start.  I hope you wish me well as I do for you and trust me when I say I’ll be truly working in the client’s best interests.

  GGGR - I certainly do wish you well.    Off subject - You are doing your 66 first, then taking the 7?  Interesting.[/quote]
Yeah, I was going to do the 7 first and they wanted me to take a class to help but it wasn't offered or was full in December so to keep things moving along I'm just doing the 66 first and have the 7 set up for January.

[quote=iceco1d][quote=Hank Moody] [quote=iceco1d]GG, GR…My “opinion” post wasn’t serious.  I’m not that much of a d|ck.  Usually. 

  There certainly can be unethical advisors, as there can be unethical people in any profession.  My point, was that the mortgage industry, quite obviously, has/had more than their fair share such characters.  It was also my point, that I'm uneasy about the influx of those people into our industry - as it seems that being a 'financial advisor' is one of the top alternate career choices for ex-mortgage brokers/salespeople.    Scary.  These are some of the same jerkoffs that you'll see selling 15 year surrender EIAs, and dropping B-share tickets up to the firm maximum.  They will be the guys that throw together shit-bag portfolios of funds, from whatever wholesaler takes them out to dinner the most.  These will be the same guys that call their A-share buying clients every 3 or 4 years to tell them about the "new, better fund, from this other fund family" their clients will "like better."  Or selling A shares, with the intention of moving clients to a fee platform 3 years later.  And then, no less, when their poor clients get to retirement, they will set them up with a handy-dandy 5% withdrawal rate on their portfolio of Growth & Income mutual funds, and that will be their "income planning."  They will be busy gathering assets, churning old A-shares, whatever.    With the baby boomers retiring.  With SS in shambles.  With the retirement burden falling on individuals.  We need more competent people in this business.  The mortgage talent pool (no play on words intended) isn't where I'd fish for those people (yes, there are diamonds in the rough).   My gosh - so you explained these loans to people.  Whoopy.  You couldn't see that these effing loans were ridiculous?  That these people were going to get blown up?    That's like me explaining how a ROTH IRA works to a prospect, but ignoring the fact that they have $30K in credit card debt @ 22% interest, and still letting them DCA their spare money into their ROTH, instead of paying down their credit.  "But John Q. Public, I explained how the ROTH works, and how the investments work...sure I could tell that investing money prior to paying down high interest debt wasn't in your best interest and would probably screw you over long-term...but I explained it to you!  You made the final decision!"   I agree with your stance on the Community Reinvestment Act.   However, you need to realize - the 'mortgage guys' had one helluva role in this.  Most certainly the BIGGEST role.  Wall street played its part.  However, they are second to blame.  Notice, I said THEY, and not US.  Those of US, on this board, aren't investment bankers.  We are FAs, or FCs/FRs/insurance agents, whatever, but we are not investment bankers, and WE didn't do this.         [/quote]

How is a 15 year surrender EIA worse than a 35 year surrender 401K?
[/quote]   Hank, let me preface this by saying that it is NOT my aim to get into an "annuities are bad" discussion with you.   How is it worse?  An EIA is a PRODUCT.  If that PRODUCT has a 15 year surrender period, it is because the PRODUCT had a high commission attached to it.  Chances are, a different product, with a more reasonable surrender period, but less commission could have been used.  Therefore, the SURRENDER, exists as motivation for a SALESPERSON.    Alright.  Now a 401K is an ACCOUNT TYPE.  Not a product.  Furthermore, 401Ks do not have a 'surrender' - that is just a context you created to sell annuities.  Good for you, but don't use it in a debate with me.  Now that ACCOUNT, has a tax penalty, not a surrender.  That PENALTY exists to MOTIVATE the masses to SAVE for RETIREMENT, not pay a salesperson a commission.   It is quite clear that a 401K account is a vehicle to help us save for retirement, and NOT a product.  Therefore, the ONLY people that should have one, are the people who WANT to save for retirement.    I don't do enough annuity biz to give specific examples, but I think it's safe to say that if there is a 15 year surrender EIA out there, there is another EIA out there that is identical in every way, except a) lower surrender, and b) lower commission.   Don't confuse this by me saying that annuity salespeople shouldn't get paid.  They should.  Sometimes it is excessive.  This is one of those times.  [/quote]

How much should annuity salesmen get paid?

[quote=iceco1d]

Depends.  I’d like to think that the good ones that do what’s best for clients get paid better than the guys on Dateline…but I know that isn’t the way the world works.  It’s not my call anyway. 

Maybe you could give us some insight/your .02.  After all, that's your area of expertise, is it not?

  Edit - Don't get me wrong here.  Yes, my particular approach generally focuses on investment costs.  However, I think it is absolutely ridiculous the way we are expected to always find ways, to get paid less.  It's absurd.   Those feelings aside, I think a 15 year surrender or CDSC is excessive in any case.  7 - OK.  5 - Much better.  Most people have trouble committing to what they are doing next week, let alone what their needs will be in 10 or 15 years.  [/quote]

Ice, are you even allowed to sell EIA's?

[quote=iceco1d]

Yes. 

[/quote]

Why is it that a 10% tax penalty to motivate people to stay invested to save for retirement a good thing and a surrender period to motivate people to stay invested for retirement a bad thing? Is it the principal guarantee that you find to be so offensive?

[quote=iceco1d]

If there were no serious tax consequences to pulling a 401K early, most dumbasses would take a nice fat paycheck when they leave service and buy a Corvette, rather than roll it over and keep saving for retirement.  This would increase the burden on Social Security (note:  I never said the penalty was a ‘good thing’ - I simply expressed my belief in why it exists).

The surrender on an EIA (or any product, annuity, mutual fund, whatever) has nothing to do with motivating the customer to save for retirement.  It is directly tied to the amount of commission paid to the rep that sold the product.  I have no problem with you, or anyone else making shitloads of money.  More power to you.  Really though, I reiterate...15 years, is excessive.   Oh wait...in addition to that surrender penalty, a pre-59 1/2er gets the tax penalties as well.    Seriously.  I am not here bashing all EIAs.  Or bashing annuities.  Nor am I "offended" by any of this.    Anyway, this conversation is obviously veering in an unproductive direction, and I have no time for, or interest in that.  It's too bad, I was asking you a genuine question.   Off to an appointment I go, then to a Xmas party.  Have a good weekend everyone.  [/quote]

I've never sold a 15 year annuity because they don't pay enough. It's awfully hard to tie up assets that long without being properly compensated. I sell what people will buy. I'd rather make 8% on a completed sale than to blow a 12% commission on something that people won't buy. Ethically, I don't have a problem with 15 years, though. If someone has a long time horizon and wants to safely earn 6-8%, over time, they can do a great job. The longer the surrender period, the more up years you will have.