Four out of five borrowers who come up for renewal stay with their existing mortgage lender.1 That’s why trailer fees are popular with some brokers.
This week, Street Capital made a change to its trailer fee program for the better. Whereas previously a borrower’s mortgage would be restricted if a broker elected to be paid trailer fees, now those restrictions are completely eliminated.
Before this week, the fine print on Street Loyalty Program mortgages included:
a prohibition on paying out the mortgage in the first three years (unless due to a bona fide sale)
reinvestment fees for early termination
a nonstandard and potentially disadvantageous penalty based on bond yields
an 18-year minimum amortization (it’s now been reduced to 16 years)
These limits were clearly unfriendly to consumers and created conflicts for brokers, so many brokers simply refused to sell Loyalty products. Street rightly recognized this and found a way to do away with them.
Now, all prime products at Street offer two straightforward options to brokers who sell them: Upfront compensation (the “Street Program”) and a trailer based model (the “Loyalty Program”), with no downside for Street customers either way.
Note: These improvements also apply to the “upfront” model offered under the Street Loyalty Program.