Now before you think this is a post on how great Mortgage Brokers are versus Loan Officers at a Direct Lender sorry to disappoint you. This post is to educate you on a bad loan officer as well as a bad Mortgage Broker can be anywhere even at a DIRECT LENDER.
Today I met with a perspective client who was supposed to close her loan last Friday with her Direct Lender. She was quoted a rate (even given a Good Faith Estimate and a Truth-In-Lending) that does not exist unless she was willing to buy down the rate with several points. Which I did ask her, and she informed me that her Loan Officer told her that her loan did not come with any points or fee's because she was a client of the bank.
On Thursday she went to her local bank to ask her Loan Officer if they where still on for Friday and what time should she be at the bank? Here comes the fun part. The Loan Officer informed her that she did not have enough insurance to cover her loan on the 30 year fix rate that he promised her. (She lives in a Condo and has a master policy paid through her HOA) However, he told her that he could approve her on a slightly higher rate if she would go to a 5 year ARM.
It was a good thing I was wearing rubber soled shoes when she told me that. It was getting a little thick.
I tried to be as diplomatic as possible and informed her that Insurance Policy Coverage does not vary from Loan program to Loan Program. I went on to tell her that her DTI (Debt-To-Income) can vary from program to program but not her insurance.
I went on to tell her to demand to speak to the underwriter of the file. Since it was a Direct Lender I am sure she would be able to speak to him/her to find out the truth. After all they told her it was their money that they Lend.
In closing, I hope this shows all the people who swear that they only use a Direct Lender instead of a Mortgage Company or a Broker that a bad Loan Officer can appear in anyone of these instituitions.
For more info: Mortgage Advice in South Florida
Full-Time Mortgage Broker in South FL. Palm Beach County. Specializing in Hard Money / Private Money, Foreign Nationals, Jumbo and Super Jumbo Loans. In addition I work with Today's Premiere Lenders.
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Hence everyone is getting a bad rap (no pun intended). I don't know if it's negligence or they truly don't know what they're doing.
Maria, In this case after listening to the entire story I really believe the Loan Officer new what they where doing and just giving her a snow job. She told me so many lines that I hear before that the Loan Officer told her. Thank you for your comment
It is true that there are bad apples in all lending venues. Unfortunately the consumer does not find this out until it is too late!
Good thought Matthew. There are good and bad, qualified and unqualified, and skilled and unskilled individuals at direct retail lenders, mortage bankers, and mortgage brokers. No one type of institution has a monopoly on either side of the coin.
I typically tell my clients that they can get significantly better rates if they DONT go to their local bank....typically I'm right!
Gary, You said it. It is sad they won't find out.
Ted, True, In this case this Loan Officer was just a salesman that is all.
Kaushik. LOL.... No Comment.. But I won't disagree with you..:-)
Matt,
The thing I can't figure out is how come it has to be such a mystery sometimes who the lender is...is it because it is still being shopped and if so...isn't that a disclosure..i know with us they are supposed to inform us...it most certainly can effect the loan. Rates can change too.
Matt.... as you stated, this can happen with any lender, may it be a broker or a banker. Yes, it comes down to the loan officer. They are the one that can tell the consumer lies or stretch the truth. Again, so many people go off of a big name, thinking that because they are big, they must be good.
As you are doing here, you are educating people. What's sad is that this loan officer is changing the rate on false information to as why he is changing the rate. Sad... very sad, but it happens.
Neal, Usually it is to prevent the borrower from shopping
Jeff, Sad part is that it is a huge bank. One that I am sure you are signed up with. You are right it does happen. Thanks for your comment
Matthew- That is why we also need to keep banks out of Real Estate! Could you imagine listing your home for sale with one of these? I just cringe when my clients tell us that they are using their bank. There is only one bank that I trust and that is Bank United but that is because I am very good friends with the head manager and she oversees any deals. But I refer our clients to mortgage brokers. Now that the one I use is moving to a bank to work I will no longer recommend him. So now it is You and Tom who will get our referrals! Katerina
One of my current clients said, "Bank of America is giving me a great rate (7.25%) with NO Closing Costs! Can you beat that?"
I kindly showed him that the lowest rate he can get is 6.25% and pay closing costs up front. I showed him the difference in payments and the future break-even point for paying the closing costs up front.
We should be closing in (2) weeks. :-)
Katerina, Thank you for the email..:-) I can't even think about having a bank being a Realtor...wow
Ricardo, LOL....Congrats on your closing
Loved Ricardo Bueno's comment! Continue to educate Matt and thank you for doing it!!
There's good and bad in all businesses, industries and people. Harumph...the way the world goes round to offset all us good one :) If only....
In any case, the best we can do is give our advice, our information or in our cases..refer them to the good guys.
Matt - you are a good one and you and lenders like you give us faith and let us know what to look for in a good lender
Dealing directly with a bank loan officer can be a real pain in the neck! Thanks, but no thanks to that one!
Jason, Ricardo's comment was great I agree with you. Thanks for your support
Sally, I agree. I just have read recently on A/R how some people will only tell their clients to go to their local banks. Just because you go their it does not mean you will get good service. Thanks for your comment
Thesa, Thank you..<blush> I appreciate that
Bill & Barbara Jo, I agree thanks but no thanks. In this case it was a refi but it could have easily been a purchase.
Matt,
My take is, and has always been, Bank Mortgage Brokers are no different than a sleazy Mortgage Broker off the street. I won't argue that there aren't good bank Brokers, but they are all in it for a buck.
Good post,
Tom Weiss
Matt - glad to hear your shoes had rubber soles! I also hope they were machine washable...
Tom, Thanks.. People are good and bad in every industry
Susie, I was able to hose them off..lol
Unfortunately, too many of these people are too embarassed o come back when they get screwed by the unscrupulous lender.
Tom, You maybe right. In this case the client might because she really need to refinance because her ARM came do.