How Does RP Funding Stay Competitive Without Charging Lender Fees?

Wayne in Edgewater is curious how RP Funding can stay competitive without charging lender fees. Robert Palmer explains.

Not only does RP Funding charge no lender fees, we guarantee the lowest rate. We will give you $1000 if you can find a better rate than what we can offer. How do we do it? Number one, we take it out of commissions. A lot of mortgage companies are paying $3,000-$5,000 and sometimes up to $7,000 per closing and commission. Our industry has grown to a point where the average salesperson closes 1.5 to 2 loans a month so they have to make a significant chunk of commission. RP Funding's salespeople close 15 to 20 deals a month while on salary, so when you take the salary and the bonus they make it's around $500 to $600 a deal as opposed to thousands. Secondly, RP Funding is a direct lender. There is no middleman. We trade securities directly with Fannie Mae, Freddie Mac and Ginnie Mac whereas other mortgage brokers make their money, sell your loan to a mid-tier aggregator who also makes money, and only then is your loan sold to the servicer. By cutting all that out, using sophisticated trading techniques to get the best prices possible and saving money on the back end allows RP Funding to make that guarantee.