Kent Conrad

[Guest]

Problem is we have conflicting sources. One says he saved $10,700 on his closing costs, the other says he saved that much every year. The fact that he offered to write the check for $10,700 leads me to think that it was a one time savings. I could be wrong of course and would need to see the actual loan documentations. Even if it was a 15 or 30 year mortgage, his annual savings would not be $10,000

15 Year Mortgage calculations

9617.46 @ 7.00 percent (monthly)
Or
$115,409 per year

Vs.

9029.27 @ 6.00 percent (monthly)
Or
$108,351 per year
For a total savings of
$7,058 per year

30 year mortgage calculations

7118.74 @ 7.00 percent (monthly)
Or
$85,424.88 per year

Vs.

6415.19 @ 6.00 percent (monthly)
Or
$76982.28 per year
For a total savings of:
$8442.60 annually

The shorter the term the loan, the more he saves per year due to amortization.

Here is the site that broke the story first, notice how they only claim a one time 10,700 deduct as well.

[Guest]

Conrad and his ilk make way to much anyway.

[DaveH]

tjamz;223284 wrote:
The fact that he offered to write the check for $10,700 leads me to think that he knows he screwed up and is trying to make it go away.

Fixed it for you.

[MisterCMK]

reshalghoul;223302 wrote:
Conrad and his ilk make way to much anyway.

Your usage of the word "to" is incorrect. You should have used "too" as you are talking about something being in excess.

El oh el. Who are you to decide how much is too much money for a person to make? Jealous?

[XJHEAD]

tjamz;223284 wrote:
Problem is we have conflicting sources. One says he saved $10,700 on his closing costs, the other says he saved that much every year. The fact that he offered to write the check for $10,700 leads me to think that it was a one time savings. I could be wrong of course and would need to see the actual loan documentations. .

I guess I do not see where it is 1 point on closing costs. He was given a 1 point drop on his interest rate which equals 1%, not .1% that is a big difference.

In-forum wrote:
Conrad said he didn’t know the loan officer who handled his 2004 refinance had been directed to deduct one point from the loan’s cost, which he now knows reduced his upfront closing costs by $10,700.

http://www.in-forum.com/articles/index.cfm?id=205694&section=news

[XJHEAD]

DaveH;223313 wrote:
Fixed it for you.

He already made a payment to Missouri Valley Chapter of Habitat for Humanity in Bismarck. He is willing to give the same back to Countrywide, and he still saves approx. that same amount annually for the next XX years.

[Guest]

XJHEAD;223321 wrote:
I guess I do not see where it is 1 point on closing costs. He was given a 1 point drop on his interest rate which equals 1%, not .1% that is a big difference.

http://www.in-forum.com/articles/index.cfm?id=205694&section=news

Fargo Forum wrote:
Conrad said he didn’t know the loan officer who handled his 2004 refinance had been directed to deduct one point from the loan’s cost, which he now knows <u>reduced his upfront closing costs by $10,700.</u>
Many news organizations, including the Post, reported that Conrad got the $10,700 break on the original loan in 2002, which wasn’t the case.
The instruction to the Countrywide loan officer was issued nearly two years after Conrad originally obtained a Countrywide mortgage on the beach house, and also nearly two years after he said he had a “serendipitous” 30-second phone conversation with Mozilo, whom he said he has never sought and had not talked to before and hasn’t since.

When mortgage companies refer to "points" they are referring to .1% not 1% (EDIT: actually, in researching, it sounds like it is more like .125%). Like stated before, at the time of closing, you can "Buy Points" down on your mortgage by putting down a higher down payment. When you do this, it reduces your rate by .1% (instead of 5.9% you would only pay 5.8% for example).

Now, if they were talking about knocking 1 point off the loan origination fees, then that would be a deduction of 1 percentage point. In which case Conrad would have saved $10,700 upfront (as indicated in all the articles) as a one time savings. Given the fact that various mortgage vendors have differing loan origination fees (I've paid as high as 3% and as low as 2% on origination fees for my home mortgage and refinance respectively) I wouldn't have thought anything if one lender was 1% lower than the other....nor would I complain or question it.

[XJHEAD]

tjamz;223326 wrote:
When mortgage companies refer to "points" they are referring to .1% not 1% (EDIT: actually, in researching, it sounds like it is more like .125%). Like stated before, at the time of closing, you can "Buy Points" down on your mortgage by putting down a higher down payment. When you do this, it reduces your rate by .1% (instead of 5.9% you would only pay 5.8% for example).

Now, if they were talking about knocking 1 point off the loan origination fees, then that would be a deduction of 1 percentage point. In which case Conrad would have saved $10,700 upfront (as indicated in all the articles) as a one time savings. Given the fact that various mortgage vendors have differing loan origination fees (I've paid as high as 3% and as low as 2% on origination fees for my home mortgage and refinance respectively) I wouldn't have thought anything if one lender was 1% lower than the other....nor would I complain or question it.

None of the articles are going into great detail of what is going on, the writers probally have no clue on what they are talking about. The way I see it is he shopped for a mortgage, didn't like the numbers, called his pal, he hooked him up and they lowered his interest rate by 1% (they call it one point) one point is 1% no ifs ands or buts....... Now on a normal mortgage deal, one can possible buy down the interest rate by using discount points. There are two types of points, discount points and origination points.

Discount points:
These are prepaid interest on the mortgage loan. The more points you pay, the lower the interest rate on the loan and vice versa. You can pay anywhere from 0 to 4 points, depending on how much you want to lower your rates. A 1 point deal usually takes about .25% of your loans interest. If you are going to be in a home for a while this is a good option as over the long term it will save you monies. You are pre-paying your interest up front.

Origination fee:
This is charged by the lender to cover the costs of making the loan. The origination fee is deductible if it was used to obtain the mortgage and not to pay other closing costs.

[Guest]

This post is deleted!

[Guest]

XJHEAD;223322 wrote:
He already made a payment to Missouri Valley Chapter of Habitat for Humanity in Bismarck. He is willing to give the same back to Countrywide, and he still saves approx. that same amount annually for the next XX years.

Again, that depends on what you call a point (1% or .1%) and also if it was on his rate or origination fees.

[XJHEAD]

OK, after some deep reading, here is what took place from my understanding
Conrad called his pal, he gave the phone to CW's founder and CEO, ( who just happened to be with him;))he told him to call one of his loan officers. The loan officer was instructed to waive the 1 point discount fee for him. So he got the loan at the lower rate and did not have to pay the $10,700. But was also allowed a loan on another piece of property that didn't meet policies of CW's loan approvals

[Guest]

XJHEAD;223338 wrote:
OK, after some deep reading, here is what took place from my understanding
Conrad called his pal, he gave the phone to CW's founder and CEO, ( who just happened to be with him;))he told him to call one of his loan officers. The loan officer was instructed to waive the 1 point discount fee for him. So he got the loan at the lower rate and did not have to pay the $10,700. But was also allowed a loan on another piece of property that didn't meet policies of CW's loan approvals

This I can agree with as this is pretty much what I had heard too. The 2nd piece of property was an 8 plex that his brothers and he own in Bismarck. They made an exception in lending him the money to re-fi that loan as well. Normally they only allow 4 unit buildings to be financed through them. They did make the exception because he was a Senator according to news reports. I don't know the inner workings of CW, but I can imagine they are similar to other banks in that loan officers have the ability to waive rules like that w/ approval from higher ups (my wife works at a bank and says this is a daily occurance there as well). Yes, he probably (most likely) received preferential treatment because he is a senator, but I'm also willing to bet that if he went to any bank in ND or elsewhere they would make an exception for him as well if he didn't fit the mold of the normal loans.

[Guest]

MisterCMK;223317 wrote:
Your usage of the word "to" is incorrect. You should have used "too" as you are talking about something being in excess.

El oh el. Who are you to decide how much is too much money for a person to make? Jealous?

You are correct sir. My failure leaves me in shame.

I'm not jealous insomuch as Conrad's, and any Congressperson's, salary is paid by my, yours, and anyone's, taxes. These people are supposed to be elected as public servants -- listening to their constituants and voting for them accordingly. They are not royalty. It makes you wonder how someone like John McCain has multiple houses or a senator from North Dakota has a $1,400,000 dollar beachfront house. There was some sort of scandal involving Barack Obama and his huge house in Chicago. This happens too frequently to be coincidential.

[Guest]

reshalghoul;223346 wrote:
It makes you wonder how someone like John McCain has multiple houses or a senator from North Dakota has a $1,400,000 dollar beachfront house.

Conrad's wife is a lobbyist for Major League Baseball. She makes a LOT of money.

[inspector01]

reshalghoul;223346 wrote:
It makes you wonder how someone like John McCain has multiple houses

John McCains Father-In-Law started one of the largest distributors of Anheuser-Busch in the country, his wife has plenty of money(estimated at $100 million+).

[Guest]

Ahh, these are things I did not know. Thanks inspector and jamz.