I picked up a new client this week, with an interesting set of circumstances.  I want to share it with the community, because there is a great lesson to learn here.  My borrower went into a local housing development, and really liked one of the finished homes that they were selling.  He went into the sales office to inquire about purchasing the home, and they referred him to their inside mortgage agent, for a loan approval.  They collected his financials and pulled his credit, and offered him an FHA loan with a 3.5% downpayment, or conventional loan with a 20% downpayment.  My borrower asked them if he could go conventional with less money down and they told him no, and that this was all that they could offer him, and that this was all he could do.  They then pressured him by telling him that he had to choose which loan program he wanted because they had others that were interested in buying the home.

He was immediately turned off by the pressure, and became uncomfortable with them.  He told them he would get back to them.  He then contacted my office wanting to get pre-approved for a home loan.  I then submitted the loan, and approved him for a conventional purchase with 5% down.  The guy had 800 credit scores.  I generated an approval letter for him to share with the sellers, and they would not accept that he had secured financing through another mortgage company.  They presented him with a letter and asked him to sign it, obligating him to pay $250 per day past the expected close of escrow date, because he chose to work with his own lender.  They then threatened to take away the seller concessions they offered him, if he went with me.

My borrower became furious.  As he stated to me, they did not present all of his financing options available to him, then they attempt to penalize him for working with someone he's comfortable with, and then threaten to remove the seller concessions when they were originally offered to him because he was not working with a buyers agent.  He almost walked away from this purchase. He also felt because he was of asian decent and his english was not perfect, that they were racially discriminating by originally telling him that he had to go with their mortgage people. Fortunately, I was able to speak to him and suggest they would agree to work with us, and sure enough they did.

The moral of this story is that no one needs to force anyone to do anything in this business.  While sales may be slow for some of us, the home sells itself.  Forcing potential clients to work with people they're not comfortable with hurts everyone.  The credibility of this developer is now in question and the borrower does not feel good about this transaction.  There may very well be violations of the Department of Real Estate codes, as well as racially predatory practices that took place.

My thoughts are, be a professional.  Do your job thoroughly, and respectively.  Do not assume because someone doesn't speak perfect english, that they're stupid.  If we all try to be considerate and respectful with each other, and those we work for, as well as to our clients, we can have very successful closings that bring future referrals our way.

Joe Almirantearena - California Home Loans