Let me start by saying that I know there are many good loan officers and lenders in other states who may be able to do a quality job on a mortgage. Unfortunately I have not seen a single loan generated through an out of state loan officer go smoothly.
That is a terrible batting average. The story gets worse. In a previous blog post The Lending Industry Needs to Step Up to the Plate I stated that a major problem in the lending industry is there is no easy recourse for a buyer who is treated unfairly by a lender. For out of state lenders it is even harder.
This Wednesday we had as our main speaker for our regional Realtors meeting a representative for Regulated Industries Complaint Office (RICO) from the department of Commerce and Consumer Affairs for the State of Hawaii. She made a presentation on the most common complaints against real estate agents and how to avoid them. That will be another interesting post. But the important part was the Q&A session at the end of her presentation.
One of the top agents in our area asked the big question. What is the procedure for filing a complaint against an out of state loan officer who violates the law or creates harm to one of our clients? Her response was that they have no authority and do not regulate out of state loan officers or lenders. They can only regulate loan officers who have a Hawaii license. Did you hear that? A loan officer does business over the phone or the internet, makes a big mess and we have no recourse short of taking it to the Federal level. Now she did say we can file a complaint with them or the Better Business Bureau, so if anyone checks on them in the future they will be made aware there have been complaints, but that is the end of their authority. In other words you can yell, but nobody can respond.
If in Hawaii and thinking of financing the purchase of your home, get references. There are many terrific local loan officers and lenders who can do a great job for you. There are also many others who may fall in another category. They also fall under local licensing laws and you have some recourse through the State of Hawaii if they do you harm.
Ask your Realtor for the names a few loan officers they have had good experiences.
Good luck and happy house hunting.
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Randy: Like I was telling you about a lead that I was going to take out tomorrow morning. I just got off the phone with him and he did the whole application process with a mainland lender. I told him this same thing and I also told him I am not into playing games with that particular lender who tells their clients that they will give them a rebate to use their preferred agents. (what it is is that they buy off the client for 1,500 for credit for closing costs which is paid by the agent) No deal here. He was saying he doesn't care about their agents. We'll see if I hear from him tonight.
I refuse to not have a recourse. No wonder they don't care about timelines with us being over here and them over there. No recourse.