Home : Blogs : Janet Guilbault California Mortgage Banker/Broker : California Mortgage Advisor

Before You Bash Your Mortgage Broker: Take This Test

Test question: What do the following 3 situations have in common? Your answer can only be one word.

An increasing number of frustrated Realtors posting on ActiveRain about late closings and bashing complaining about mortgage people
Frustrated customers at dealerships who cannot get the cars/trucks they want.
I have been waiting for 2 weeks for Home Depot to deliver wood to rebuild a deck (when they told us it would take 2 days)

Mortgage people suck (too many words)

Car dealers suck (still too many words)

The service at Home Depot sucks (Nope)

The answer is CAPACITY, as in "so many people have been fired or laid off that there's nobody left to do the work."

Banks are overwhelmed and ridiculously understaffed
Car companies have closed plants and vastly reduced the number of vehicles that are being built. There are no cars in the pipeline!
Home Depot can't seem to find drivers to deliver our wood. They fired all of theirs and now contract this out.

When CAPACITY issues abound in the economy, the level of service invariably drops. You cannot deliver the same level of service without the PEOPLE TO PROVIDE IT.

Now, what does all of this mean to you as a Realtor? By the time capacity issues trickle down to you, all you see is a problem with your sale. And the potential for the deal to fall apart. And your blood pressure going up.

Never mind that closing a loan takes far more time and a far greater skill level than before. Never mind that banks are over the top when it comes to proving income, jobs, and assets. Never mind because hopefully you already knew this.

But it appears to me that mortgage people are being held to a standard that is not taking into consideration the STATE OF THE MORTGAGE INDUSTRY:

TURMOIL (from short sales, modifications, and foreclosures)
TRANSITION (from mergers and layoffs)
OVER-STIMULATION (from low rates and tax incentives)

You think your mortgage person is wasting time?

Did you know extending a lock on a $500,000 loan with Wells Fargo costs $150 a day? Do you know who pays for that most of the time? Borrower (Rare) Realtor (In what life?) Mortgage Person (Bingo!)

Did you know it takes 9 business days of waiting just to get the underwriter at Wells to LOOK at your file? And that's because it is a purchase. A refi takes 21 business days.

So, you say, send the loan elsewhere. You're a broker.

But guess what? The banks with the best rates have the slowest turn times since all the mortgage brokers pig-pile on those banks and lock loans there.

It will PAY to keep this in mind as we head into the the last half of 2009:

This is not going to get better. Buyers will be flooding into the market before the end of the year to take advantage of the tax credit. Lots of people still need to refi. More foreclosures on the horizon.
Get in tune with what is going on and write longer contracts.
Ditto for contingencies.
Seek out skilled mortgage people. Be pro-active. Not reactive when they don't meet your standards.
We have not abandoned you because of refinances. Purchases always take priority for banks and for mortgage people.
Your mortgage person has no control over the appraisal with new HVCC rules.
Who said it wouldn't be stressful? Expect delays as banks pile on last minute conditions.
Do not cause your client to believe the mortgage person is the enemy.
You are the Realtor. Do not try to be the mortgage person. Or the boss of the mortgage person.
You are not the customer. The test is not whether you are satisfied with the mortgage person. The test is if the client is satisfied with the transaction when you hand him the keys to his new home.

Written by Janet Guilbault, Mortgage Banker/Broker based out of the San Francisco Bay Area.

Posted by Janet Guilbault California Mortgage Banker/Broker on 06/05/2009 07:27 PM

Comments (119)

Referral Partnerships in the Mortgage / Finance Channel

mortgage broker, realtor success strategies, economic meltdown, referral partnerships, refinance

Post is included in group: The Ninety-ninth Percentile
Post is included in group: Realtors®
Post is included in group: Mortgages
Post is included in group: Mortgage Blogs
Post is included in group: LOANS

119 Comments on Before You Bash Your Mortgage Broker: Take This Test

JUN

Janet, I loved this, and it is SO timely for me.

A buyer client closed on a condo today that we had to get a one week extension on contract to complete. Frankly, I was surprised that it was only one week. EVERYONE from the appraisor (that wonderful HVCC in place) to the underwriter to the property management company is swamped. All because they are doing the jobs of 3 people, naturally with the payscale of one person.

Kris: Doing the jobs of 3 people. Perfectly said. That is exactly what is happening out there. And yet, unemployment in California is nearly 10%. Why in the heck don't they hire some people?

Janet, I think every company is looking at the bottom line. Can they get their current employee to be grateful to have a job and push them to the extreme? You bet. They're doing it and getting away with it. This wouldn't have happened 10 years ago but it's a whole 'nother ballgame now isn't it?

Thanks for reminding us we all need to be a little more patient.

What they are getting away with is very poor customer service. It is completely NO FRILLS out there...have you noticed?

It is also: shut up, get in line, we're calling the shots.

There is going to be hell to pay for this. We can rise above all of this in the real estate industry.

But not by getting mad at each other. By joining forces.

Pat: You are welcome. I think we are all forced into learning this at this point in time.

Janet - I am only seeing it get worse as we get closer to the deadline for the $8000 first time buyer tax credit. Our lenders and escrow companies are already feeling the pinch. What will it be like in the middle of October?

"Joining forces" Bravo!

Here is my test to find good mortgage brokers:

If they tell me in the first meeting that "I can close loans nobody else can!" I am out of there!

Sometimes I think this phrase is taught in Mortgage Broker school to pass! LOL

When you find a good mortgage broker, hold on tight and keep a great relationship going! They are one of the most valuable members of your team!

Thanks for sharing!

~Harrison Painter

Mark: My readers know that I declared very early this year that I would not be taking a vacation this year. The reason stated is this: The year will very likely end in a big BOOM as buyers race to meet the deadline for the tax credit.

I, for one, do not want to be somewhere on a cruise in October. I want to be right where the action is so I can be toasting to a good year come 2010. THAT will be better than any cruise I can think of.

Harrison, I could not agree more and love that you used the word "TEAM".

"I can close loans nobody else can!"

Lame.

Janet- EVEN THOUGH you havent commented on MY BLOGs..>I will continue to do so on yours! LOLOLOL EVENTUALLY I WILL WIN YOU OVER< or, wear you down......! :)

The only thing you left out, was the list of people that are complaining about us! LOL :)

GREAT JOB! WOW, two features in 3 days...you are leading a charmed life! ...Just kidding!

What, not Donne comment yet??

I would not change a single word in this blog! WELL DONE!!

Deserved, risky, but most excellent dude! (that was for all my California friends)

Darin

Update: Yes, Janet the real Darin is standing up!!! LOL

Update#2 It will be interesting to see if the same people bashing, hating, and being negative COMMENT ON YOUR BLOG!!!

I would not change a single word in this blog!

The real Darin would never say this, so who are you really, dude?????

Power to the mortgage people. Someone had to write this, ya know?

Janet,

You make LOTS of terrific & valuable points - I appreciate your perspective!

To expand on the "team concept", I would definitely have to say that most coherent professionals know that we are now in the midst of very challenging times (surely caused by a lack of sufficient manpower, for one!).

However, I would have to say that even those who are working on a skeleton crew can HUGELY minimize the stress and strain on the involved parties if they simply COMMUNICATE!!!!

I am a firm believer that so very many of the problems that come up along the way can be either eliminated or (at the very least) minimized if we are simply kept in the loop as to what is going on.

With all the tools we have at our disposal in this oh-so techy age, that should not be very hard, right????

I love surprises.....but only good ones! :0)

Thanks for your expertise!

Edith Schreiber - Dallas, Texas

Here in WA. we always call one lender....the one that rhymes with "Smells". Today a real estate agent told me she was informed by the rep from "Smells" that by the end of June they have to have buyers closing papers available to the buyer 10 days prior to signing. So, I wondered why I had never heard of that. I call DFI and spoke with them about it and they said there is no such a ruling in DFI that it is strictly a "Smells" thing. Also do any of you know that a rep from "Smells" or any other bank does not require to be a licensed loan originator. I find that very interesting even though I did know that. Who would really want to work with someone that is not licensed in the mortgage arena??Experience in the mortgage origination field is more than necessary to the buyers, Realtor, and their own success. Me, I have met each and every closing date...and I base that on the fact that after 27 years in the mortgage bus, I best know what I am doing and know how to deal with the lenders. Not alone know where to place a file. Borrowers will pay a bit more if they know their loan will close in a timely manner. But "Smell" puts out these bait and switch rates...and because they are so under staffed they cannot perform making the locks expire. Then they will not give anyone a break on that even though it is their problem. With that, one could just go to a "real" lender where their loan is going to close with the terms they locked with with a great interest rate!!

Great Post! I have been putting a blog like this together...but honestly every time I read it, I thought to myself, "wow, I'm a jerf"! I can't tell you enough how many times I have to remind real estate agents that we are suppose to be working together, not against each other. There are times that issues may arise where an underwriter is nit-picking the file to death. In the end, all that matters is the client is satisfied with the end product, not the road it took to get there. If we all work together and remind the client of the times we are facing, they will understand and be satisfied with thier transaction.

You are SUPERB....Realtors don't understand what goes on in our world...they have to know WE WANT the deal to go through just as they do.. WE don't get paid unless we close a loan. We also get referral business from the SAME CLIENT.. Please understand that this is VERY REAL what is happening out in the mortgage world. Right now, rates have gone way up and we are trying to float as many loans as we can hoping the rates will be lowered and we can lock them in. It is taking so long for a loan to go to underwriting once it's been submitted that we CANNOT lock in the rates with this much time...

So thank you for your comment on what we really do as Mortgage Brokers.

I live in NH and it's the same out here as it is all over the country. PATIENTS is golden...everyone is in the same situation so no other lender or bank is any faster. It's the way of the industry right now. Hopefully it will get better.

I loved what you said about the fact that closing a transaction takes "a greater level of skill" than ever before. This is so true. There are so many variables that surround our real estate transactions, such as the new appraisal law, which can add more days to the transaction. The time I spend on reading, attending meetings, and networking with my peers is consuming. But this is how I stay current with my knowledge as things are changing sometimes week by week. Thank you for this article as it does apprise all of us of the need to have patience, stay professional and work with our lenders. It does help to work with lenders you know and trust and who are seasoned. Good, trusting relationships go far when problems arrise. There seems to be more camaraderie and less finger pointing when there is the element of trust and professionalism among Realtors and Lenders.

I am in bash-the-invisible-appraiser mode. NO WAY would I ever bash my favorite LO! Instead of being the boss of y'all I ask kindly "when do you think" or "may I have an update". Went from 30 to 45 to now 60 day escrows and that is mostly because of the appraisal. I am seeing some backlog with underwriting but not horribly bad considering high buyer demand! Keep fighting the good fight. I am sure you can write many bad things about Realtors!

We are partners in this and we need to make sure we communicate properly so we are all on the same page with timelines. When that is how a lending/agent relationship is looked at everyone will prosper!

Janet- Thanks for bringing to light a better understanding of what is happening behind closed doors. Communication between lender and agent is vital. So many times it is not the person but the situation that is what causes all the frustrations yet communication, true communication would nip so much of that in the bud. And yes, this comment comes from someone who you called a basher and gave a bashing too. And I am still alive and kicking. Imagine that :)

You are so right that is why short sales take so long too. A low priority to take care of

I've always thought that mortgage lenders had the hardest jobs! I don't know how you ever keep up with all the changes and new loans. Your blog was excellent and deserved a feature!

Martha: I agree with you that communication is vital. I would also like to tell you that posts like yours have truly enlightened me. If you feel this way, so do hundreds of other Realtors. Thank you for your post, and for your comment. Posts like yours help me understand how Realtors feel, and what I can do differently.

I am sorry to react to your post with such negativity.

Please know that part of the reason is because I feel this is bad for ActiveRain.

Can you imagine me telling a story about why an appraiser blew it? Or why a stager had no idea what she was doing?

This shows that we are at war as a community. That we are not acting together to bring our real estate clients a successful transaction.

That cannot be a good thing if what we are trying to do is promote the real estate industry.

I felt I had to respond.

You have my utmost respect and your opinion is valued. Thank you!

Renee: I read your post about appraisers gone wild and loved it. Seriously, you are so funny.

Here's the truth: a 60 day escrow is probably coming to a theater near you.

I have already decided that I need a 60 lock at WF when comparing to other lenders.

I actually e-mailed my rep and asked her for a volume discount on lock extensions.That is because I have spent thousands (that's right, thousands) to extend locks for people who have 4 something rates, but WF cannot underwrite these loans fast enough to keep within the orginal 45 day lock.

Janet...thanks for a great inside look at your side of this gig! It's a challenge to get the Sellers to take the longer contingencies on the sales, but you have it right on! I think it is equally important that we work TOGETHER with the mortgage broker and our clients to make sure that as much of the paperwork as possible is done before we get a contract. Then, the lender only has to get an appraisal and the contract. Of course, underwriting can ask for any number of things after this point, but at least we have tried to cover our bases.

Thanks for giving me an insight!

Janet you get Kudos of the month for this posting. You definitely hit the nail on the head on all aspects of what is going on with our economy. Loan Officer are now peace officers during the time of getting the transactions completed. You fight to get the deals and then you fight to keep them. Thanks Jane for this post!

Hi Janet -- When things are verifiable, which isn't always the case, I agree with you. There are bad apples out there in all specialities of all things real estate. If that isn't an issue, which is many times, I absolutely agree with you.

Today, we missed a closing because the bank wired the money to the wrong title company. I almost wondered whether the bank just decided NOT to wire the funds today because there was a last minute condition to funding, and that was the story they told our title company...

I guess I'll find out Monday!

I am so glad that I have a Mortgage Broker who doesn't have any of these issues. They have an in house appraisal dept that complys with HVCC and they have in house underwriters and turn around is only 48 hours. My only sad problem is she has no source for Manufactured Home loans anymore and I have to branch out to other banks/brokers for those loans and I miss my great lady and company. Right now I'm dedicated to 12 hour days to get it done. Is it wrong I should expect the same from my mortgage broker?

Janet, this is an excellent and timely post. Great reminder of what's going on in your world. Seriously, why don't the banks hire real estate agents to straighten out the tangle in their short sale departments and hire transfer back some processors to take care of the volume? Even if they did it on a free-lance basis, it would help - unless they're actually hoping rates will go up and locks will evaporate and they'll make more money!

Sharon

Exelent information.. I have a file that we are waing for Wells Fargo to close.. The appraisal already in hand.. still gonna take 4 weeks.

Janet,

I think you've done a great job of expressing the realities of today's new real estate/mortgage market.

I never knew that the mortgage rep had to pay for rate lock extensions. Aside from that, I think we should all be able to figure out the rest of this... lack of actual people to do the work. But it still boils down to a lot of frustration >.<

Hi Janet!
It isn't the loan officers, mortgage brokers, lenders that I am frustrated with. I can handle just about anything, as long as I know what that "anything" is, when it happens. Somewhere along the line communication went out the window. It is the surprises, long after they are known by other entities, that are frustrating Realtors.
Also, I believe much of the frustration can be avoided if the buyers and sellers are well informed up front that there are many hurdles in this market that we will have to overcome, so be ready. This isn't bashing the parties invovled...it is just being realistic. If the hurdles don't appear, we all look like heroes, and if they do, we are prepared.
Lastly, remaining loyal to the mortage brokers and lenders that perform for us is vital. These people work their tail off and deserve our loyalty. Buyers can choose to go with their "friends" or "cheaper lenders", but it is on us to warn them of possible issues that can arise when doing so.
Great Post!

JUN

Those are all great points. Its stressful at times out there but most of these people are doing their best.

#1) Reputable lenders have informed us that closings are taking longer so plan ahead

#2) This is the best time ever to buy a new car though I would still buy used. Dealers are desperate

#3) You should be picking up your own wood. Enterprise rent a car has trucks really cheap on the weekends.

There, my work here is done. Everyone have a great weekend!

I am fortunate t have two great lenders I work with often. Although the loan process is lengthening, they keep me informed, which is invaluable in real estate. Anxious buyers and seller's like to know what's going on, so having a lender who communicates with me keeps egg off my face.

Janet - As you and I both know, communicating with our clients as well as with the other parties in the transaction are an absolute must, regardless of how ugly the truth is. But as you put so perfectly, it's not likely to get any better any time soon. For months, I have been telling not only my clients to ask for longer escrows but for my Realtor friends/partners to write longer contracts too.

As for changing lenders, while I try to avoid doing that whenever possible, sometimes it's unavoidable. The last time I had to do that was after I had appealed all the way to the VP of Risk Assessment when a file for an A+ client of mine got suspended for an absolutely ridiculous reason by a big, national bank (that got billions is bailout money). Actually, the scariest part about that transaction was that this big, national bank now has an Escalation Division and I was assigned to an Escalation Team Member when I insisted on appealing the suspension. SERIOUSLY! Needless to say, I haven't submitted a file to that big, national bank since.

Anyway, I like your post and hopefully it will help explain just some of the things that LO's are now up against when closing a loan these days. While I can not control every single issue that may come up during the process, one thing I always do is make sure that my clients as well as everyone in the transaction knows exactly where we stand. There's simply no excuse for not keeping everyone up to date on the process. Why more LO's don't operate this is beyond me but it certainly doesn't give every Realtor license to just start bashing the profession simply because of one experience with one LO and there is simply too much of this already here on AR.

Janet, this is wonderful, thank you. For those mortgage bankers out there who are terrific, they are honest about what is going on, and keep their agents & buyers in the loop. You are right that so much of it is out of their hands, but it is how they handle the issues that makes them true professionals.

I was about to write a post yesterday on this myself. I have good friends that UW. They are doing the jobs of three and the pipeline is so behind its not even funny.

Janet,

You have the right letter C but the wrong word! It is Communication.

I don't blame the LO as I agree with what you've said. Rich beat me to the punch as to my biggest complaint with the entire system....

COMMUNICATION (or, rather, a lack thereof)

If people would take 2 minutes to COMMUNICATE what is going on (or NOT going on) we would have far fewer problems and upset clients.

When an agent has a bad experience with a particular loan officer, writing about it helps us all. It helps other agents, especially newer ones, who don't yet quite understand the synergy between an agent's case management and the loan officer's work with that contract.

When a loan officer has a bad experience with a nagligent agent, they could write about it to let other agents know how their actions may determine success or failure of their contracts.

Some of us also write about contracts that closed due to the extraordinary work of the loan officer. I know I have.

Are mortgage brokers a protected class whereby they cannot be criticized??

I've been fighting for years for higher entry standards for real estate licensees. I take a lot of bashing for that too by folks who believe that "everyone deserves a chance". Hardly a basis for any standards at all.

What does the mortgage broker industry do to monitor, set standards for or otherwise work for honesty and professionalism for mortgage brokers? The advertising on the Internet and TV are often very misleading. The public is duped by advertising on a regular basis.

Seems to me that, when an ActiveRain member has a bad experience with a loan officer, writing about it serves to alert not only the public about what can happen, but also other real estate practitioners and mortgage industry practitioners.

Hello Rainers: It is around 5:30 AM here on the West Coast. As always, your comments never disappoint me and far outshine the post. Your opinions are such valuable input! Now to respond to you...

Great loan officers are rare and hard to find. Especially in this market, many times the AE isn't able to keep up with the ever changing guidelines. I think more should be written in rain about the good, the bad and the ugly for educational reasons.

I find LO's more often than not wanting to be an adversary, controlling and not wanting to work together. Purchase transaction management (team leader) is the real estate agents job.

Communication, honesty, trust and working together to exceed customer's expectations is our goal.

Lenn: It is always hard to disagree with you, because of your vast fan base here in the Rain. But on this issue I must disagree. Here's why:

These bad experiences often turn into rants (emotional hissy-fits). I believe they make the Realtor look worse than the mortgage person in many cases. They display a lack of understanding and a lack of professionalism.
These posts get loads of "right on! show 'em you won't take that!" comments. This is not valuable input.
Featuring these posts tears down the real estate industry when we are trying to elevate our industry. God knows the media already rips us to shreds as it is.
It will never be balanced because you will never see a mortgage person rant about a Realtor. We get business from Realtors and are not going to publicly bite the hand that feeds us.
It will never be balanced because Realtors far out number Mortgage People on ActiveRain.
We are supposed to be a community. It implies support for each other. I can't imagine a feature where we took a stager and ripped apart the work she did.

You wrote:

I would say this is airing dirty laundry. There is a way to alert the public about pitfalls in the mortgage process. It is NOT by telling stories about less than perfect mortgage people.

Mark, you wrote:

I find LO's more often than not wanting to be an adversary, controlling and not wanting to work together.

I will assure you that many mortgage people feel the same way about Realtors but would never publicly state this.

I would be interested to know if other readers of this post agree that the Realtor should be the "team leader". Since I am not sure what is meant by this, I don't feel in a position to comment on it.

Tim and Susan: I agree the number one complaint is communication. Until I joined AR I had no idea how important it was to Realtors to know what is happening every step of the way. Some of the drama and the stuff going on with a loan is hard for the average Realtor to grasp. It can cause stress and panic among all parties involved! so.....

It is a very difficult line to walk, but I will say this: when faced with choice, always communicate. I try to do so once a day when someone is in contract. Overkill? Yes. Better safe than sorry.

I think it is time that we reinstitute the law of counting to 10 first before we blow. There is a lot of tension in the air in real estate and other industries hard hit. It is EASY to go on a self righteous rant, but harder, and more productive, to work to solve the problem. I remember the energy crash of 1982 where we went from tons of people making money, competence be damned, to a only the strong survive market. We need to separate the system failures from the people who are doing their best in a difficult situation.

Rich: I am going to stick with Capacity. A mortgage person can control the communication. A mortgage person cannot control an economy where banks do not have enough people to handle the business they have, have a cumbersome and new appraisal process, and are just overwhelmed with refinances.

Laura: Our bank at RPM had all the processors working through the entire Memorial Day weekend. They have a night shift and a day shift. The are having one record month after another. That's what's going on everywhere.

Marney: I have always said it is not the issue itself that makes someone mad. It is how it is handled. It is never fun for the loan officer to call Realtors and clients and say that something has gone wrong. But if done right away, and offered with solutions and apologies (whether or not it is their fault), then most people do not feel the need to "shoot the messenger" and will work with you.

Janet you said, "The banks with the best rates have the slowest turn times since all the mortgage brokers pig-pile on those banks and lock loans there."

You also said a lender has no control over the appraisal since the new regulations.

I agree with both those points and they are valid.

But, (you knew there would be a but)

They do have control to order the appraisal the day the receive the contract, knowing it is taking longer.
They do have the ability to say up front, I can't close this in 30 days, please make it 45 days.

I closed two condos this week, both were new U of Michigan residents

Both ended up paying cash with help from their parents

Both lenders dropped the ball

One didn't lock at 4.85% said he was too busy with refinances

One didn't catch a paper trail that came up at the last minute

Thank goodness they had parents who could and did pay cash for their sons. Not everyone has wealthy parents who could do this. In fact the majority don't. Both had just got off their honeymoon and both had the U Halls packed.

Now what would have happened to these first time homebuyers? These were clearly lender errors. No I haven't posted on it on Activerain but I may in the future.

Joe P. So very well said! Thank you and I agree.

Missy: I agee with you, but here's the deal:

The appriasal is now ordered by the bank. Bank cannot order until the file is submitted. File has to be ready to submit. Sometimes it is not ready to submit the day the contract is written. It is why I am such a strong advocate of getting as far into the approval process as you can before you go into contract. But I realize this is not always possible.

FYI: I am not having timeline issues with appraisals, even with HVCC.

I absolutely recommend 45 day contracts. I hope every Realtor who reads this will not WAIT for the mortgage person to inform them. Call them up and ASK. Especially in a situation where the shorter term contract may win the negotiations. We can still close loans in 30 days.

Throw a few rotten tomatoes at the guy who said he couldn't lock because of refinances. We did suddenly lose our 4% rates, however. But he should just admit he was floating the rate and lost the bet.

Locking loans, and timing loans have become quite the art in this market. Takes a pretty sharp cookie as you are finding out.

Janet: Great post, in Manhattan New York market, the mortgage brokers are hurting because of all the consolidation in the banks, I have always value my relationship with our mortgage professionals because they are a very important part of the deal.

Janet - Like you, I'm up early on a Saturday morning. I need to finish up some paperwork before I meet with a client this morning to sign off on his app. Having read through the new comments, I just wanted to comment on your really fine points. While they are all very good points, the one that doesn't have much weight with me is #4.

As you may remember in some of our conversations with each other, I learned very early in my career that establishing a referral business with Realtors was not going to be the foundation of my business. While I have established a good referral business (approx. 55% of my biz), very little of it (less than 10%) comes from Realtors and those referrals are exclusively from my Realtor friends. These Realtors are people I have worked with over the years where we have come to know, trust and respect each other because of the way that we do business together and the way that we treat our clients as well as each other.

I have nothing but praise for my Realtor friends/partners because they would never, ever, go online and publicly bash me, or any LO for that matter, because of some issue that came up in the transaction they/we were working on together. We simply don't treat each other that way because we like, trust and respect each other too much to sabotage the mutually rewarding relationship that we have worked hard to build. There would be nothing to gain and everything to lose by disrespecting each other in that way.

On that note, I usually have no problem standing up to AR Realtors who go around bashing LO's for sport; they don't feed me and never will. Your #1 point is the best one. Having been through this experience with a few AR Realtors who publicly bash LO's, as far as I'm concerned, they do illustrate just how little they understand about the loan process and look bad doing too.

Janet: Thanks for the post. I always enjoy them! Most people in our business are patient and understanding. If we're doing our job and communicating throughout the process, it shouldn't be a big deal. Realtors know it's taking longer to get a deal closed these days. Heck, alot of them are dealing with short sales and the like where the close date could be months away. More than ever, it's important to work with professionals who know what they're doing. I've always stayed out of the way of other people's work and expect realtors to do the same with me. It's a fantastic relationship if done right. If it isn't, then it's best to look for someone else. Again, thank you. I appreciate you bringing levity to what has become at times a pretty frustating process for us all!

I can't say that I do now but I do hope to have a couple of great relationships with mortgage people just simply because we do live and work together. The more the merrier.

Donne: Are you referring to the list I directed to Lenn (for the #4)? I think you were.

I was making the point that Realtors feel freedom and a duty to "expose" mortgage disasters.

Which was Lenn's point.

Although I am thankful for YOU, who always tells it like it is, there are many who would never step up to the plate like you do.

Did you notice Darin called this post "risky"????? I will also tell you Brian Brady advised me against writing about capacity issues since I would take nothing but grief for doing so.

You are the exception. I am simply a huge supporter of AR (and the Realtors here). I can take the bashing myself....It is part of the drill.

But these posts trash AR and I am standing up for them as much as for our industry as a whole.

Thank you for being Donne!!! You are the best.

Paul: I think the relationship is a very delicate one. It should always be handled with care, courtesy, and respect for the other person. But Realtors are not in the same loop as us and we often act as whipping boys.

I say the way to solve this is keep them in the loop at all times with information such as what I posted here.

Teral: You don't have to think of your mortgage people as partners. That is a pretty heavy committment. It pays to have multiple people, check them out with other Realtors, and be able to have more than one horse in the barn.

That horse could kick the bucket at anytime. Or just kick you. Nice to have other ponies to ride.

Janet,

Your remark, "Some of the drama and the stuff going on with a loan is hard for the average [agent] to grasp" is disappointing to hear.

I don't doubt your word at all but it saddens me that your experience with the "average" agent has been this way. Not only do I think every agent should have a firm grasp of all aspects of the transaction, including the loan process but they also should have enough knowledge to ask the right questions in order to give the right answers regarding the process to their clients.

Nonetheless, as you implied, failure to communicate whether one party thinks the other understands what is being conveyed is a poor excuse and does nothing to make the entire prcess smoother for everyone involved.

Nothing increases the level of stress more than "not knowing" what is happening with the date of closing quickly approaching. We all need to remember that the buyers and sellers have their entire lives centered around the closing date. They must pack, schedule movers, utility transfers and a multitude of other finely tuned/executed coordinates made with varying parties. When the LO fails to properly communicate what is happening STRESS LEVELS GO THROUGH THE ROOF and guess who catches the brunt of the client's frustration... yep, their agent.

Thank you for the great post, my wife and I are running into the same in our niche market with the delay in the "next big wave of REOs" we are running out of homes to sell... This will help in educating our buyers thanks again!

Janet,

I agree 100% with Time and Susan. I don't think we are bashing LO's as much as we are upset with the process. Knowledge is the key to understanding with a solid underpinning of communication. Let us never forget who makes these transactions a reality......The Buyers and Sellers!

Maybe it is different out here, but I have only had one experience with one totally inept mortgage broker in 5 years. The others have all been average to excellent.

I have only had one deal NOT close on time and that was because the mortgage broker overpromised. They did a 30 day close on the contract (hello...haven't been doing those for a bit here) and I called the mortgage broker to ask what day she really could close on. Said she could do it...and of course she didn't. But, I had already told the seller from the get go that I highly doubted that it would close on time. The deal was fine because I checked in with the broker 1-2 times a week and advised my seller accordingly.

I can also tell you that when I get an offer with the preapp letter and an unrealistic closing, I call the mortgage broker up and ask when they really can close and put that in a counter offer. I can't tell you how relieved some of them have been to have me ask what is realistic for them.

Agents need to be realistic and understand the dynamics of the mortgage world and not set up mortgage brokers to look like idiots. Agents need to be proactive and talking with mortgage brokers at minimum weekly. Mortgage brokers just need to answer our requests for loan status, and help set realistic time frames to close.

Rants either way can be avoided if realistic expectations are set early on.

What a great post - Some of it sounds like mortgage nirvana! But it doesn't have to be this way. I'd like to add that some professionals want both "perfect" scenarios and perfect honesty, but when the honesty causes "non-perfect" scenarios then there can be a strain in the relationship, even in situations where everyone is completely upfront and proactive in giving expaectations and timeframes. Appraisals are like a kick in the teeth right now. The wonderful, fair, professional relationships we lenders have created with appraisers gets thrown out the window because some outside judging force thinks changing the appraisal system would change what we are in. Pathetic - alright I'm stopping ...

Great post. Too often the name of the game is .... who is at fault? Who can we blame?

We all need to adjust the way we do business and not place the blame on someone else.

Advice for mortgage people: keep us in the loop! Many times deals fall thru or bad will is generated, people get antsy, when there is SILENCE. Keep talking.

We had a buyer last week on edge because the mortgage broker had NO NEWS so didn't make one phone call all week to the anxious buyer. A simple "Hey I'm here and have no news" can go a long way.

Tim and Susan: I am sorry if you misunderstood me. I guess I am of the opinion that Realtors know the housing market and mortgage people know the loan market. Both are specialties that require much knowledge and study on a daily basis to bring true value to the table.

I could never hope to understand your job...if only you knew how many times I tell clients "Please ask your Realtor that question" (whether I know the answer or not....)

But Realtors (plenty of them right here in the Rain) somehow believe they should be giving their clients mortgage advice and have a problem saying this "Please ask your mortgage person that question".

You don't need to be a mortgage expert. You need to know one!

I could not agree more with you about communication. To all parties. It is the responsibility of the mortgage person to keep stress levels low. But what a fine line!!!!

Do you realize that by revealing every little detail of a loan that stress levels can also go through the roof????

Rich Cotton: I read your transparency post. And all the comments that went with it. I do think you were mortgage bashing in that post and personally, I don't think it should have been featured. I remember being too upset to even comment on that post.

I am sorry you have had bad experiences that led you to feel that frustrated. However, every single Realtor has it within their power to go find themselves a good mortgage broker. If you were hiring an assistant or taking on a partner you would spend hours, days, weeks, interviewing and checking references.

But somehow you feel a brilliant mortgage person should fall from the sky.

Any mortgage person here would probably keel over in shock if a Realtor actually called them and said...."I'm trying to find a few good mortgage people to help me with my business. Would you like to have coffee so we could get to know each other?"

Joe P.: Love this statement:

It is EASY to go on a self righteous rant, but harder, and more productive, to work to solve the problem.

Thank you. Thank you. Thank you.

It is also far more professional.

Russell B.: Home Depot delivered our wood today. HOORAY!

Used cars are bringing huge premiums because everyone thinks like you. Used cars are not a bargain right now.

Melina: You and I could work together well. You have a very realistic approach. I am sure part of the reason you have had so few issues is because you seem to understand working with mortgage people very well.

I really like the fact you call when you get a preapproval. I think this should happen everytime, not just when you are concerned about the closing date.

Patti B: Agree with you about Smells. a 45 day lock on a refi was just that: bait. It is not enough time. Have you ever noticed turn times are business days but lock days include weekends and holidays?

Most brokers are like you and me. We are on to them. I will only consider a refi based on their 60 day pricing from here on out.

Janet - "But somehow you feel a brilliant mortgage person should fall from the sky." ROTFLMAO! What a great line. I'm actually still laughing as I type this. OMG! Isn't that the truth.

As for "Any mortgage person here would probably keel over in shock if a Realtor actually called them and said...."I'm trying to find a few good mortgage people to help me with my business. Would you like to have coffee so we could get to know each other?"

I've done that with every Realtor I've ever sent a client to and I would expect any Realtor to do the same to me before sending me a client. Oh wait, they have! When I think back on how my current Realtor friends/partners and I became friends/partners, it was getting together after a successful close where we had developed a rather nice and professional report with each other, that we thought it might be nice to get to know each other a little bit better.

Other than my handful of Realtor friends/partners, I don't know any other Realtors/LO's that do that. You and I can't be the only ones here on AR that do that - can we? Maybe it's a CA thing? :)

Janet - So true! Great post. What about proficiency? Improved skills and greater knowledge=greater capacity. Most get caught up in being so busy they can't function. The best service providers have become proficient.

Janet, you are BRILLIANT!! BRAVO for a fine and timely blog entry.

I really have trouble feeling bad for LO's that don't accurately judge their timeline. Not having files prepared, not returning phone calls or keeping the borrower informed is not excusable because volume is up, employee training, employee insufficiency etc. There are contract terms which they are made aware of and yet have little mind of these timelines.

Not knowing what documents are required because of evolving lending pratices is not an excuse either, we real estate agents/brokers can't use that as an excuse why should lenders or their representatives?

I'd rather have a promise that means something than being told one thing and then having the rug pulled at the last minute. Just be honest, keep the borrower & us up to date, yes it's a difficult phone call to make every now and then but better to get it over with than have anguish on the part of the borrower.

Glad to see the market has shaken out some of the lesser mortgage professionals, now if the ones who remain step up their services to keep their clients informed & happy we'll all be better for it.

JUN

LO: Mr. Realtor, your 30 day closing schedule is, per current market circumstances, unrealistic.

Hungry (and angry) Realtor: Well, you'd better close on time or I'll find someone who will. I've got bills to pay!

Well Janet:
Capacity is definitely one issue. I realize of course that Accountability and Responsibility are a distant 2nd. and 3rd. But we definitely would not be in this position had we put it in this order in the first place: Responsibility, Accountability and Capacity. The mortgage industry esp. the big five at the time. Placed an emphasis on capacity first and for most. The mortgage Brokers did as many loans (Capacity) as they could possibly do without regard to responsibility and accountability. They gave No Doc loans to anyone and everyone. They did 100% loans to anyone and everyone. They did not worry about responsibility or accountability as long as they could then sell that loan on the secondary Market many times before the loan closed. Mortgage Brokers charge absorbentant fees for processing and packaging the loans, they called it Loan origination fees. They even began to allow Realtor’s to originate loans some Mortgage Broker’s got their Real Estate License. Some Even got a licensure to sell what they called Mortgage Life Insurance and even casualty Insurance. They tried to be all encompassing so they could get more $$$$$. You know it was separated before and is now again separated, as it should be. I sell Real Estate. I don’t do Mortgages, Insurance and the like. No conflict of interest. Greed got us into this mess and guess what? Accountability and Responsibility will get us out. Capacity? I suggest you replace that word with integrity. Its lack of integrity as to why they can’t process the business they take on. Like it or not if you were a part of it then you have reaped what you have sown. Excuses are a never-ending story. Lets get Responsible, Accountable the our Capacity will increase and we can get back to the proper way of doing business.
BB Realtor

I do agree with alot of your post, but several things only happen in fantasy land. First, as far as picking a great mortgage person, as realtors, that is not always in our control. I do have great mortgage people and would love it if my clients would always use them but that is not always the case. Sometimes they have already picked one from a friend or relatives suggestion, and you can't always convince them otherwise.

Second, as realtors, we do need to know alot more about the mortgage business than you do about real estate. When I am showing houses and working with a client, I get as many or more mortgage questions as I do real estate questions. If my answer every time were "ask your mortgage advisor"I would not have many customers for very long. Alot of times answering mortgage questions is the final step that gets them to write an offer. Most of the time this is after hours or on weekends when mortgage people aren't at work or answering the phone and waiting till the next day or Monday will usually result in never hearing from them again. We have a motto in real estate-"Never let them go home and sleep on it if you can help it". It will cost you every time.

Third, mortgage people don't always seem to realize what "binding contract" means and that there are legal obgligations that must be met. Timelines are one of them. If I am riding on a mortgage broker it is because there is a timeline to be met and it is MY job to see that it happens if at all possible. I always check with the mortgage broker when writing a contract to make sure that the closing date can be met. I know things can happen, but overstaffing and nit-picking by underwriters and such are becoming a scapegoat excuse being used ALOT. Deals fall apart because of these events. Timelines are not always extendable, and guess who always becomes the fall guy no matter what happens or who's fault it is? The Realtor. I have spent 3 months working working with a client just to have a deal fall apart because the mortgage broker couldn't meet a timeline that they said they could. And when stuff goes wrong and a deal falls apart for whatever reason, it is My license and reputation on the line alot more than the mortgage brokers. I do have alot of respect for the mortgage brokers and I agree we should all learn to work together better. Maybe you should try and learn a little more about real estate and then you would realize why we press so hard sometimes.

I wondered how long it would be until there would be a "SHORTAGE" of cars! I didn't think it would be this soon though with so many dealers closing and liquidating inventory in the deadline of 3 weeks....I thought in a year or two we would see a real shortage and then of course high prices...

Thanks for the attitude adjustment. We all needed that swift kick in the pants. It's tough times and tough sales and we need to work as a team and not point fingers. Great post!

Janet,

Just to provide a little perspective on where I'm coming from:

We had an LO that we absolutely loved! We met him right after he got into the business and provided his first referral. For the next three years we sent him more business (according to him) than he got from any other agents in town.

Then a couple of years ago he was working on three transactions with us (our customers) at the same time. He had just moved to a new bank and was having a multitude of problems with his new team which was causing delays and requiring a lot of duplication of paperwork on our part and on the part of our customers.

To make matters worse, this was happening during the Thanksgiving - Christmas holidays. You can imagine how emotional our customers were during all this.

For the first time in our 3 year relationship, he stopped returning our phone calls or responding to emails in a timely manner. He kept telling us not to worry about anything because "I've never let you down before."

We trusted him but our customers (all three) were getting very frustrated and ANGRY. You see, he wasn't communicating with them either. Finally one of the buyers tracked him down and confronted him face-to-face. He admitted to the buyer that there were problems but promised that he would handle it. Then he said this:

"Don't tell Tim and Susan that we had this conversation. Don't talk to them about the loan at all."

Guess what they did the moment they left him... yep, the called us and told us everything.

Long story, short... we did eventually close on 2 of the 3 but later than promised and with much anxiety and anger. One of the buyers (one that closed... not the one that didn't) blamed us for the problems. Oh, they blamed the LO too but since we were the Real Estate Agents, they placed the bulk of the blame on us even though they admitted that we had no control over the situation.

They blamed us for not keeping them informed. The fact that we were not kept informed didn't matter to them because they believed that we SHOULD HAVE KNOWN what was happening.

The LO admitted that he had told the buyer not to discuss it with us but he did it to "protect us" he said. He said basically the same thing that you said - "Do you realize that by revealing every little detail of a loan that stress levels can also go through the roof????"

My answer to him was that I am a big boy and perfectly capable of handling reality. What I cannot handle or accept is not being kept informed about events that have a direct affect on me and/or my customer. I do not need to be protected. I can handle the truth!

You see, if he had communicated with us honestly and forthrightly we could have worked together to ease the tension and anxiety that our customers were experiencing.

By the way, we have given him no referrals since then. Burn me once, shame on you... burn me twice, shame on me.

And, I agree with you 100% that you are the expert on mortgages. I am not and I don't pretend to be. I always defer to the lender on any and all questions regarding loans. I know my legal and ethical duties and responsibilities. I am not a mortgage broker. I am not a lawyer. I am not an accountant. And I don't give any advice in those areas... but that doesn't mean that I shouldn't be kept in the loop because, you see, I am expected to coordinate every phase of the transaction I cannot do my job if I don't have up-to-date and accurate information.

COMMUNICATION... the word of the day! ;-)

What I find fault with on the loan officer and/or processor (whichever one is dealing with their client) is that they do not explain in the BEGINNING what the process is. When the client gets their preapproval in 3 days, they think they're on their way. They find a home & now all of a sudden it's gong to be 3-4-5 weeks depending on the type of financing. Why didn't they know this from the beginning? So *I* as the Realtor do not have to coddle, make excuses, deal with the frustration they're laying out on me every two days throughout.

Put it in writing. As an intro letter to your company. A simple sentence or two to explain that they don't already have a loan. They've been approved for the loan process. WHICH DEPENDING on the type of financing may take blah, blah blah. That'll take care of 1/2 the clients that actually read the docs you give them. But, it will also give me something to fall back on.

Yes, Mr. Client, I know it's been 3 weeks that why they give you the letter in the beginning so you know it's a lengthy process, etc., etc.

The one other item that should be mentioned is if they take too long to find a home that the documents they've already provided have expired and they have to update the items. This is for you guys, not me, necessarily. This is usually when my clients start calling the Loan Officer names. "I already did that. Why he's making me do this again...It's ridiculous. (clean version)

And so begins the Realtor's job of keeping the peace. (in an area, we have zero control of)

At one point, someone wrote about mortgage brokers becoming a thing of the past. The problem is, they have absolutely no influence on the process. Some of them are very hard workers who do their very best to move things along, but they can't do any more than the Realtor because they are not part of the bank that they're lending through.

If you have a direct lender, they at least have pull if something needs to move. That said, big banks seem to be having a ton of issues.

In the past 5 months, I've had one big bank deny a 4 unit with 20% down, excellent credit, purchasing for 90% of the appraisal price be denied the day before closing. Why? Because we couldn't seem to get an appraiser there until 3 wks after the short sale was approved. Then, because if the building were to be destroyed more than 80%, it could only be replaced by a 2 unit.

Still this makes no sense because of hazard insurance. They said, but if it's something insurance doesn't cover.... I say " you don't get paid regardless of weather you can build an equivelant replacement" Aoparantly this is an underwriting guideline accross the board.

Then another big bank, the buyers of a sale I was involved with had final loan approval, then the bank realized it FORGOT to do the appraisal.... HELLO!

So now..... I have 3 lenders I refer to... Only the best with their in house money available to lend and ones that have direct communication with the underwriter. Of course not the big banks who have so much going on that they could care less if they don't get any more business from you or your clients.

Really well written Janet. I think the main thing we all need in this market is......patience. It can be very frustrating if we don't put things in perspective. We also have to make sure the folks we are working with understand the process and the time frames involved. Don't write a deaal with a 30 day close unless the buyer is paying cash. If there's a mortgage involved use 60 days. If it's a short sale use 90 days.

It's our job to figure these things out and then work accordingly.

There's something to be said about local lendors and in-house underwiters!

Great post! Having worked as a LO at Wells, I can see both sides of the equation, and have more tolerance when things get crosswise, which seems to frequently happen even with a "perfect" file these days.

Janet...

You wrote: "Until I joined AR I had no idea how important it was to Realtors to know what is happening every step of the way."

Why not?? That was very telling. We are in fact a legal representative of our clients, charged with coordinating the entire transaction, of which the loan funding is only one, albeit one of the most important, elements of the transaction. We know we can't control it, but as others have said, we are dealing with a binding legal contract, with deadlines--many with time is of the essence caveats, and that's something that too many mortgage brokers quite simply ignore. Other issues must be dealt with in a timely fashion, some of them only after the mortgage is assured. With no communication or attention to those deadlines, agents and buyers experience anxiety and intense frustration. Which leads me to my last point.

Someone wrote, (something like) "they'll be happy as long as the loan closes successfully." Nothing could be further from the truth. I've had many buyers say, "I'm glad we finally got the house, but this just about did me in. I'll NEVER use THAT lender again."

I'm not bashing LOs/Mortgage Brokers -- I LOVE --highly value the relationship I have with the ones who do what they say when they say they'll do it. I also understand that they are often hamstrung by underwriters and changing rules. No problem. Just tell me about it immediately so I can plan, and advise my clients. Those little details that would "scare" buyers and agents? Phooey! We deal with those pivotal issues in every other facet of the transaction. What scares me--and scares me away--is a mortgage broker/LO who doesn't think I have the professional sense to deal with the issues. What I can't deal with, and won't deal with more than once, is a mortage person who doesn't him/herself know the process and explain it to us upfront, or one who refuses to communicate; and I've just added a third: one who thinks "it'll be alright as long as the loan eventually gets funded."

Even when the market was red hot and cash was flowing freely and Realtors and mortgage brokers and everyone else were making huge bucks, closings still got delayed by a few days. I can remember delays happening on probably 50% of the closings even then. So what is new? I don't buy all these excuses about being short staffed. Excuses are only good to those that make them.

Rob: You may not buy it, you make think it is an excuse. But I have never seen turn times as long as they are now. Norm is 3-5 days...or less.

Charlene: I have had many clients confide in me that "I will never use that Realtor AGAIN!....or this "My Realtor is only thinking about her commission!" I agree with you that the process of a smooth transaction matters. Not just the fact it closed.

No matter what I think, you will always, 100% of the time, find me defending that Realtor and paying strict attention to what is MY job, and what is the Realtor's job. I do that because we are on the same team, with the same goal: a happy and satisfied client.

Clients can sometimes be like little kids who play Mommy against Daddy. I believe this is easy to solve with strong teamwork by Realtor and Mortgage person from day one.

Your comments do not come off as bashing at all. I really appreciate you have directly told us what you expect.

I, for one, do not think your expectations are out of line at all.

My comment about learning from ActiveRain....Charlene, there could not be a better forum for what goes on inside the head of a real estate agent than ActiveRain. I will simply say I am a FAR BETTER mortgage person as a result of all of the positive and negative comments that have been directed to me.

Bryant: Thank you for your wise perspective. Why set ourselves up for failure by writing contracts that are too short? EVERY loan officer can calculate the days to close and add some cushion days.

I know you would rather write a shorter contract. But I also know you will come to appreciate honesty up front instead of a messy end to the transaction because of a late closing.

Jessica: You comment illustrates a very important point: Both property and client must qualify. The best preapproval in the world cannot protect you from the fact the property may not qualify. Know that the mortgage person should CHECK GUIDELINES in the beginning when a property is not plain vanilla.

Secondly, I am getting loans from people who are completely frustrated when they first try to "GO DIRECT".

They will tell me they have been completely ignored for 3 weeks. Knowing what I know about banks right now.....I think a broker/banker is your very best bet. Sorry if that seems like an advertisement. It is the absolute truth.

PS I wrote a pretty famous post about mortgage brokers going bye-bye. Must be good because it has been plagiarized more than you can imagine.

Mary W.: I think your suggestions are fabulous!!!! I think I will begin doing that right away. Thank you so much.

Tim and Susan: Sad story.... I am going to agree with you that no Realtor needs PROTECTING from information regarding the loan.

No Realtor should hear information on the loan FROM THE CLIENT. Sheesh, what was he thinking?

I will also say that once the teamwork breaks down between Realtor and mortgage person...the train goes off the track. Mortgage person must guard against that happening at all times when the ball is in her court.

It doesn't always crash....this is true. But you as a Realtor may decide not to take the train again.

Thanks for sharing.

Jeff D: Good suggestion. Mortgage brokers would be better if they knew more about real estate.

Also, good point: You often do take the blame when things go wrong....or at least you are "guilty by association"

I would also agree with your point that you need to know more about mortgages than I need to know about real estate.

For all of these reasons, I am advocating STRONGER partnerships so that the client gets a superior experience..

When your client picks their own mortgage person is the time to immediately call that person and introduce yourself. Get the e-mail address and tell them what your expectations are....and what the contingency dates are. Why take any chances?

This is just the same as setting up the correct expectaions for your clients!!!!!

Harried loan officer: Better to have no loan than one that blows up at the end.

Janet - We don't experiment with lenders. We have good ones and they always come through. I really appreciate your concept of capacity. The lenders and title companies cut back staff. The market changing so quickly with the drop in interest rates, together with the delays from the new appraisal regs and you have a slowed down process. We, too, have concluded that we need to write for longer escrows. A seasoned lender will help with a timely close - they know what to anticipate and can spot a problem before it becomes a problem ... just as the agent does on the sales side of the transactionl. Nothing like experience. Very nice post!

Janet, I started out as an LO (and that was before all this mess happened) so it has given me great appreciation for what goes on on the loan side. Your post gives everybody a little bit better idea of what really goes on behind the scenes. I think the biggest thing that can help the Realtor/LO relationship is open lines of communication.

Greater skill level than before? R U kidding me!

Janet- When I read your statement about scaring clients and Realtors with TMI, I had to laugh because I have been accused on numerous occasions of doing just that. I've said it before and I'll say as often as I have to, "every LO must explain and communicate the entire loan process to both the client as well as the other parties involved. To not do so is a disservice to everyone."

Having said that, I make it a practice to go over the entire loan process with my clients from the moment we first meet and I will continue to go over it as often as necessary throughout the process. Just recently, one of my Realtor friends told me that I should probably tone down my initial presentation as well as my updates (I even blogged about this). I was told by this friend that I have a tendency to overwhelm the clients with TMI.

I would rather provide TMI than not enough because, in the past, every time I have tried to "tone it down", I get blamed for not explaining something. GO FIGURE! Whenever some Realtor tells me that I tell the client TMI, I remind them that it is my duty and responsibility to tell they everything they need to know.

If I have bashed lenders I want you to understand, it is not the mortgage brokers in general that have me up in arms, it is the banks and the underwriters. They are getting Billions to resolve this mess, but not one Toxic Asset has been purchased with TARP (Toxic Asset Relief Program). If they need people thousands are out of work. There is a climate of fear where no one wants to sign off on anything. A good portion of this has to do with Government jerks.

Comments to your post...

posted....But guess what? The banks with the best rates have the slowest turn times since all the mortgage brokers pig-pile on those banks and lock loans there.

A....I agree....

It will PAY to keep this in mind as we head into the the last half of 2009:

This is not going to get better. Buyers will be flooding into the market before the end of the year to take advantage of the tax credit. Lots of people still need to refi. More foreclosures on the horizon. A..... I AGREE
Get in tune with what is going on and write longer contracts. A........DISAGREE , most of the Shortsales and REO banks are requiring 30 days or less, impossible to do with a buyers lender nowadays, its a catch 22 screwing both the buyer and the seller. then the bank REO wants a perdiem and the Lender wants a fee for relocking the loan/extension??? I have paid for a lock extension myself because of the time delays in the loan. I am a realtor. Its the banks mess 99% of the time lately. Again not the LO or the LP's fault
Ditto for contingencies. A....... DISAGREE see number 2 above. Like a Seller or Buyer wants to see a 60 to 90 day escrow at the mercy of the Banks....IS this the new transaction timeline?
Seek out skilled mortgage people. Be pro-active. Not reactive when they don't meet your standards. A.........hopefully the weak ones have left the career field.
We have not abandoned you because of refinances. Purchases always take priority for banks and for mortgage people. A...... I disagree, I have seen first hand where the underwriters focu on the 30 day or less easy refi.....pushing the new purchases out of the time contingencies
Your mortgage person has no control over the appraisal with new HVCC rules. A...I AGREE
Who said it wouldn't be stressful? Expect delays as banks pile on last minute conditions. A...MIXED...you mean to say "ever changing the rules/conditions" that underwriters are shell gaming aound mid transaction. Not the loan brokers fault noted.
Do not cause your client to believe the mortgage person is the enemy. A.... AGREED. should be the fault of the underwriters as they change the ever evolving rules every day.
You are the Realtor. Do not try to be the mortgage person. Or the boss of the mortgage person. A.... Maybe a firm timeframe commitment by the Mortgage person? Naw, thats too complicated, they'd never sign that, again its the underwriters causing most of the delays as much as 30 days. Not the LO or the LP 's fault.
You are not the customer. The test is not whether you are satisfied with the mortgage person. The test is if the client is satisfied with the transaction when you hand him the keys to his new home.

One addtional comment. If the Lender is too busy, find another one that is not. Lenders should turn down business or refer, rather than take it all in . Same goes for Realtors

Commenter 102: Thanks for your input.

Longer turntimes yet lender sellers making 30 days a requirement....here we have a huge disconnect I will agree with you. It has bedeviled our entire office. Huge issue. I cannot offer a solution except to have client already lender qualified on a to be determined property and hope purchase turn times remain at about 2 weeks.

Or...send to a random lender that no one has discovered yet. We actually have one of those in our office with fairly short turn times. Now the cat is out of the bag and we're back to pig-pile. NOT because of RATES!!!

What does this mean? That banks with shorter turn times can charge more????

I suppose you could make a case that the refi boomlet is what caused the overload....but every bank I deal with has a much shorter time line for a purchase than a refi.

Gene R: That kind of post I can live with. Please don't be mad at the underwriters. Every single one is working something like triple time just to keep pace.

The do not make guidelines. They waste no time in my opinion. But when 50 files land on their desk, they are not going to get them all done that week.

Hence, the longer turn times.

One other hiring problem: If you have not been an underwriter for a year you have a very high learning curve just because of everything that has changed. Our bank would not even hire you.

Donne: It is an extremely fine line. Every mortgage broker has probably had to put out fires that they caused themselves by TMI. Once I met with a client with the Realtor present, at the Realtor's office.

We needed a couple of signatures, but the client couldn't help but ask me questions about what was going on with his loan. Realtor listened intently, then left the room.

Realtor completely freaked out, called the owner of my company and was certain the loan was about to blow up.

My boss calmed him down and told him the loan was fine (which it was) He begged the boss not to tell me he had called behind my back and freaked out.

Naturally, when I got back to the office, I was called into the boss's office immediately. The head processor was there too. They were furious. What do you think they told me?

TMI CAN GET YOU IN TROUBLE! What in the world had I been thinking to discuss the loan in front of the Realtor?????????

PS Loan closed without a hitch, on time.

Lyn: Not sure what to make of your comment. Could you elaborate? Do you mean it DOES NOT take a greater skill level....or that it does?

Michael: I guess communication is the word of the day. I think I will stamp that on my forehead. And I have been a Realtor, so I get where they are coming from as well.

Jim: You have great perception. Thanks for the comment.

Janet - For me, the whole issue of requesting longer turn times has raised some not so pleasant experiences lately. So much here has been discussed about LO's communicating with Realtors and clients. However, communication means nothing if Realtors and clients don't listen.

Many years ago, a former broker passed along a concept to me that I found an interesting analogy to the loan process. I still use this comparison sometimes when talking to clients about the loan process. However, I've been noticing some disturbing issues in communicating with some clients and/or Realtors.

The concept was that the loan process was like taking a cross country "flight" and that I (LO) was the "pilot" and my client a "passenger". Despite the fact that we may run into some "turbulence" along the way, as a licensed and experienced "pilot" I was trained, prepared and equipped to get our "flight" safely to it's "destination" (close of escrow).

So, when I tell you Mr/Ms Client and you Mr/Ms Realtor that I need 45 days to close the loan transaction, I assure you, this is not just some number I've picked out of thin air. This is a "flight plan" that I have scheduled based on a series of processing, underwriting, conditions clearing, QC review, document preparation and funding turn times.

So when you Mr/Ms Realtor hand me a copy of the fully executed purchase contract with a 30 day escrow, don't think for one second that I am simply going to allow you to make me out as the "villain" and you the "hero". As far as I am concerned, you are nothing more than a "terrorist" who has just "hijacked" our "flight" with a "ticking time bomb" and I fully intend to alert all the other "passengers" on the "flight" about what you have done.

Furthermore, 30 days later, when you start "terrorizing" me and my team for "delaying our flight", I will proceed to remind you as well as all of the "passengers" of the "official flight plan" and not your "unofficial" one.

Lastly, 40 days later, when we safely arrive at our "destination", I will make sure that our "passengers" know that I got us there ahead of "schedule" in spite of your "terrorist actions".

When we (LO's) communicate what will be required in order to close the loan (regardless of what it is), its imperative that clients and Realtors listen. In order for communication to become effective, the message needs to be heard and understood. Bullying and "terrorizing" the "passengers" as well as the "pilot" is not only anti-productive but it also alienates you and exposes you as the true "villain", not the "hero".

Sorry for the long comment Janet (this probably should have been a post) but I just think the message is important.

Banks bring nothing but misery to real estate. It is not really individual banks' fault. The rigid framework banks work under is not conducive to real estate lending.

While banks are out of commission, it is time to develop a Private Money infrastructure.

That's why I invested 8 months of my life to wrote "Private Money: The #1 Solution to Eliminate Booms and Busts in Real Estate Forever!"

I am getting unexpected response from the investment banking industry. As soon as some of these players get SEC, FINRA, etc., blessing, they can give banks great run for their money. :)

Lee Ali

BankFreeInvesting.com

Donne, what a great analogy. It does deserve to be a post. Maybe you can give it this twist so that Realtors can answer this question:

If mortgage person tells you 40 days, and contract says 30 days, what happens next?

Have you actually gone on a flight where you said 40 days and the contract said 30 days???? Wow. That is a lot of pressure. I guess I would lock for 45 days and inform selling agent that 30 days was unrealistic right from the start. That gives sellers the heads up there will need to be an extension.

BTW, I would also put it in writing since selective hearing and short memories are also always a problem.

Janet,

One thing that I have not seen interjected, and I would place it at the top of the list as the problem creator would be GOVERNMENT. With less interference, regulation, enteraction (tarp)(HVCC). Good LO and Realtor's know how to get the job done. The government should butt out and let us get at it to bring the recovery back to this great country.

Ed Westerman

Countrylifestye Realty, L.LC.

Clever, Mo.

JUN

Janet. Great points. I guess that it can be easy to be impatient when we do not know what is going on. Thanks for the info.

Well said Janet!

If I could not use the word "Capacity" I would use "Expectations".

Many loan officers (and agents) set the stage for problems by setting an unrealistic expectation level.

The statements like -

"I have to best rates!"
"I can get it done when others can't!"
"Don't worry we close fast!"

- are early warning signs.

Janet, this is the best blog all year! Well said!

AMEN Janet. I have been saying that there are only so many grains of sand that can fall thru an hourglass.

Capacity is a big issue, and even more so is working with a skilled Mortgage Guy/Gal that knows that there is a "t" in the word Mortgage, (how to qualify, how to read a tax return, how to properly document a loan up front etc....)

for us "old timers" in the business it is De Ja Vu all over again... we are reverting back to guidlines from the past!

I've always checked with the LO that my clients are working with to find out how long they need for closing when submitting an offer - that has worked for me (and them).

so true...Due to the economy, many people have been fired and laid off in most industries. Thanks for the reminder to think twice before "complaining"

Janet- is Danell Merren related to you?? Or, maybe just a false persona?? maybe ...someone I know????? Just kidding!

Great comments here, but a little disappointing from the folks that left ....somewhat questionable comments, but didnt followup ! Oh well, we will continue to fight for teamwork!!!! Right!??

Ok, now I have to go back to being a tyrant!

C ya!

D

Yes, Danell is my alter ego. How did you guess?

We are still at our desks here on the West Coast.

Slugging it out. Bad day. Ugly rates. Cranky underwriters. Weird appraisals.

When is it time for wine?

janet- I have certainly enjoyed reading all the comments here. But more so your reaction and comments back especially to those with some not so favorable feelings about LO's. I guess I must have hit you on a bad day LOL. I have learned a lot not only from my post but from your's. Anyway, the concensus I see is that communication needs to improve both with agents and with LO's. But also attitudes need to improve as well. We are not adversaries by a long shot. As many have said, they all have their favorite LO's just like you LO's have your favorite agents. Much I am guessing is due to communication styles that brings the favorites to the forefront for each of us. Yes we are all stressed, for our own reasons, and trying to deal with a market like no other. It is tough all the way around on all sides. Add to the mix an agent or LO with a communication style different from yours and the next thing you know all hell breaks loose. Attitude raises its ugly head. This past weekend I was thinking why the heck did I ever write that post but today I am glad I did. Not for the bashing I took and am still taking from Donne on other posts but because it opened the door to your post and then to comments and thoughts that in the long run needed to be said. There was a hidden underground rumble building steam like an earthquake and now it has burst through. This market has brought hard feelings out on all sides. But know we can move forward with, hopefully, a better understanding and appreciation for each other. I know I will. BTW- Hope you get that time for some wine. :)

JUN

Martha: I am also glad you wrote that post as well. And I am so sorry that you wrote the post that finally was the straw that broke the camel's back. No wonder you were so surprised at my reaction.

I had been unable to post or comment for several weeks due to the overload at my desk. But I was reading.....and getting more and more frustrated with all the posts (not just yours) that had the same message.....the same tone.....the same level of frustration...with mortgage people.

There was simply no balance out there, no understanding, no team spirit, no compassion. You have said there was an underground rumble, and that is a very good description.

You have no idea how valuable your post actually was... to so many of us here in the Rain ...for the dialog it created and the understanding it fostered.

PS I am sorry you felt bashed. You are a very good writer. Please do not take any of this personally and continue to tell us what you think. I am a Martha fan.

Leave a response…

Name:

Email:
(optional)

Comment:

What does the graphic say?