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How Do Some People Sleep?

I know that the market is changing, but what lengths some people will go to in order to "steal" a deal away is sad. I've done this long enough to expect this type of behavior from some brokers. But we are talking about a top 10 lender in the US! This happened to a fellow broker today and I just had to share. This is a company who has a wholesale and a retail side, like most large companies do now. This is important because we deal with the wholesale side of this company on a regular basis, and know every program they offer.

The client in question can absolutely NOT show proof of income and is needing the loan to buyout a chapter 13 BK. My coworker diligently shopped everyone in our arsenal and gave the GFE to the client. He of course wanted to see what else was out there, which I don't blame him. Well, long story short, he calls today and says he really appreciates the free help repairing his credit and the outstanding customer service BUT he is getting a much better offer from another lender. We asked him if he would mind showing us his GFE just so we could better educate ourselves for future and if we had a similar program available. What we received is the finest piece of fiction ever written! They are quoting him rates on a full documentation loan, which he can not qualify for, and it is missing insurance of any kind, taxes, closing fees, title fees, title insurance, then they actually added 2 fees I've never heard of or seen! All of this along with an A paper rate. We explained it all to the customer and encouraged him to pursue these figures that were quoted. Needless to say they will not honor the quote and will not be able to disappoint this customer at the closing table. But it makes you wonder how many clients receive these liar loans and then at the closing table they go with the flow because they have bills due now or have already prespent a portion of the money.

I try to give some people the benefit of the doubt and think maybe they are new or haven't been trained. Then I see something like this and this is just plain ole bait and switch. He'll have to answer to someone much higher than me eventually. How do they sleep?????

Posted by Tom Engelhardt on 06/29/2007 03:07 PM

Comments (9)

9 Comments on How Do Some People Sleep?

JUN

2007

That's a very good question! it will be very interesting to hear the answer from these people.

I just know I am up front with my clients and I ask them to be that way with me. I will call them as soon as I have any information on their property wether it is good or not so good and we will deal with it from there. Then I know I can sleep at night.

Tom, you are not alone. Just recently, the same situation happened at a friend of mines office. The loan officers got caught for charging junk fees and got fired on the spot. Unfortunately these situations happen more frequently than they are supposed to in the first place.

It's like the bank robber, once he gets away with it the first time, they will think that they will always get away with it until one day they face the truth and get caught. The truth always comes out.

What ever happened to morals and professional ethics? It is a shame that there are wholesale lenders out there who hire their brokers unaware of the broker's unscrupulous behavior.

Some people just don't have a conscience!

Susan-I guess thats all we can do is keep doing the right thing on our end

Diana-The bank robber analogy is a good description! Very true

JUL

2007

I wrote this to a couple I have worked with, fixed their credit, found them properties, nurtures them, educated them....these FTHB....4 months later they are almost at the table with another lender because of lower costs and rates....and made an offer on a property. They sent the other GFE, after the fact, out of guilt or coutesy, I am not sure which. Luckily, thier offer wasnt accepted as they would have gone forward and been sadly suprised at closing with the low ball lender.

J and T:

Thank you very much for your quick email.

Just so you know, at quick glance: Please see line 901 on the both CWBC and my GFE......they have 1 day per diem interest, calculated at only $37.56, compared to mine, which I always calculate at 15 days which comes to $563.00. Just as I said they would do. Mine is more accurate and prepares you, as we are only guessing on what day we will close. This made a difference of $530 in our comparisons.

Further, my GFE includes 3 months taxes escrows, which is absolutely required by the lender. I calculated this at $975.00 on my GFE....They put zero....Why? There are also no lender fees....CWBC has lender fees. Mine are $395 plus $395. Theirs is not zero. Another $700 difference. If I had to erase a $395 lender fee, can I? Yes, I can. But I give you worst case, not best.

So, add that up, my GFE appears up to $2200 higher in costs! And the 6.375% in interest rate they quoted you, compared to my 6.5% (neither of which are actual, only guesses based on rates TODAY, is literally $19. per month difference in your mortgage payment.

In the end, if we are honest, their CLOSING numbers will look more like mine.... and mine, will still look like mine.

Thank you so much. I wish you all the best. I appreciate the opportunity to do business with you.

Sincerely,

JUL

2007

Tom, I had this happen to me, worse was the fact that they were a referral from a past customer to both myself and the realtor I work with. We were both flummoxed when they said they were going with this lender (advertises on tv all the time begins with a D owned by a company that starts with a G). They insisted that it was a better rate and a better GFE only problem was throughout the 5 weeks to closing they kept calling me and coming in to see me about questions they had about mortgages and buying. The whole time telling me and the Realtor they had not committed yet to a lender. About one week before closing (appraisal and survey had been done by other lender) they were still insisting they had not committed and had come in yet again to see me. I called their bluff and informed them that unless they committed to using me I wasn't answering any other questions any more as I was getting the feeling that since they had gone with a 1-800 lender they weren't getting the answers they needed. The husband hung up on me but he did call back 30 minutes later and apologized for their behaviour and admitted that that is what they were doing and they were mortified I had figured it out. Needless to say at closing they paid $2000 more in fees to this lender....Go Figure...

JUL

2007

This just goes to show, once again and in great detail, that our industry requires REGULATION that is even-handed, fair and properly enforced. Sadly, no-one who writes the laws (and has the best interests of the borrowers at heart) actually translates such earnest decency into Statute. Where is it written that once you've given a GFE that the next one is produced at Closing when costs, fees and/or rates have changed? I was under the impression that a rate rise (apparent at least when locked) or fee rise of more than $100 required redisclosure AND a letter of explanation.

JUL

2007

Liars never win!!! just keep on being honest and good things will happen... The customer your co worker will return... good luck

JUL

2007

Over estimating on the GFE helps. When the client sees that estimated cost in reality, are actually lower than what you had quoted, they are usually pleased and relieved that you prepared them for the worst and gave them better.

If ever low balled by another liar lender, I explain the over estimations and point out where they are actually going to be paying less. I also remind them that unless they have locked the rate and have got all requirements back from underwriting, nothing is guaranteed.

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