Did you know... when a buyer or seller works with a Realtor, there is a fiduciary relationship created that requires the Reator to put the client's interests above their own (exceptions to this must be stated in writing).
There is generally no such relationship between buyers and lenders. Some of the housing crisis issues may have been avoided had the lenders been more concerned for the buyer's best interests.
The following are a few warning signs that should cause a buyer to do much closer investigation:
- Claims that bad credit is not an issue
- Prepayment penalty
- Larger than normal loan charges
- Rate gouging by brokers - yield-spread premium**
- Loans without escrow accounts for taxes and insurance
- ARM loans that only go up and not down
- Initial loan to secure property with plan to replace it later
As a real estate professional, I can recommend a lender who is experienced in our market and has a history of providing good service. I also keep on top of the lending process during the transaction, to make sure everything is proceeding as it should.
It will be to your advantage to speak with your Realtor before committing to working with a lender. I welcome the opportunity to advise you.
** There's some question about this point (see comments below, particulalry #15 by Chris Olsen), and I'm willing to concede that referring to the practice as "rate gouging" may not always be fair; it's kind of like the buyer who doesn't like seeing that the seller is making a great profit on the sale, even though the buyer's getting a good deal, too.
Comments (45)Subscribe to CommentsComment