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Shift Happens

I wrote about the loss of another Lender the other day. This happened to be a good lender. Yes, there are good lenders and bad lenders out there.

I talk to many mortgage professionals on a regular basis. It's interesting as I talk to them I have noticed a paradigm shift of sorts.

What makes a Good Lender?

My original article lamented the loss of what I perceived as a good lender. But what makes a good Lender? To me the qualifications are clear.

Good Programs - I want a large variety of programs to choose from. Did you know that with something as simple as a 30 yr. fixed loan, a good lender may have 10 different loan programs? Each on has it's own guidelines and rules as to what it will do and what it won't do.
Good Communication - I want to have the ability to discuss a scenario with a Account Executive. I want to discuss the conditions with the Underwriter. I want to know what stage the loan is in at all times.
Good Track Record - Just like the girl in high school with the bad reputation, Lenders also can earn a bad rep. I'm not inclined to do business with a Lender that consistently knocks down an appraisal figure or adds last minute conditions. If I am submitting a clean file I want as few last minute surprises as possible.

Remember this is what I personally have deemed makes up Good Lender. I also appreciate many other factors. I like a good website. I like good technology.

The Public View

If you ask the public what makes a good lender they'll have a different view.

"They don't make those bad loans. You know, those Interest Only, Stated Income, Payment Options kind."
"They are strong and have plenty of money behind them."
"Their phone people are so nice..."

That's the overall public opinion today. While it may be heavily influenced by the media it is what it is. I argue that both the public and the media don't have a clear picture. Their view is skewed and incorrect.

Case in point. Not to pick on one lender but let's just look at WAMU. In the court of public opinion WAMU is a good guy. They have funny commercials. They have nice looking banks. Ask the next person you see on the street about WAMU and they'll give you a thumbs up.

The bulk of WAMU's business has been in Option ARMs. Historically that would be around 80%. Of those loans more than half were also stated income loans. I haven't seen that on my nightly news have you?

Interestingly, Wachovia which bought World Savings earlier just had a commercial on my TV pushing a 30 yr. fixed with "flexibility". Does the Public realize this too is an Option Arm? Not at all. My point is that the public is misinformed. They don't have the complete story.

Shift Happens

Two years ago, if you asked a mortgage originator what made a "good lender" they would reply with a list that might look like this:

Programs - "They have a stated 2/28 that'll go to 100% with no reserves, no sources, no seasoning and I got 2 points on the backside."
Conditions - "I told them I couldn't get the verification of deposit so they waived it."
Speed - "The underwriter pushed it to Docs prior to clearing all the conditions. We closed in a week."

Today, in what I think is a deliberate attempt (conscience or not) to distant themselves from what the public and media are saying is a bad lender many loan originators are singing a different tune. I've heard them touting the same diatribe as the news reports.

"Good riddance! They were a lousy lender. All they did was Stated Income and Option Arms!"

Many of these are the same people that were aggressively selling the very same loans. I can't blame them. It's marketing, it's salesmanship, it's wanting to look the best in the public eye. Right or wrong, I find it interesting.

So... What song are you singing today?

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, loan originator

, mortgage professional

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Posted by Mike Mueller on 10/03/2007 10:03 AM

Comments (18)

loan officer

Originally posted at: Mike Mueller, Social Media.ist: Shift Happens

18 Comments on Shift Happens

OCT

2007

I "Love" WAMU.....am I informed...absolutely not......do they know my name...absolutely...do I trust them...absolutely....did I go to them for my loan...absolutely NOT.

Your post was interesting, and flowed enough to actually make me "read" it :) :) Good points you made.

Kathy - I like WAMU. I even have a WAMU loan. Do I have a POA? Not a chance. Nothing against it - it just isn't right for me. Thanks for the kind words.

Interesting info. I had no idea WAMU had been focusing on Option ARMS. I really like Wells Fargo, as they have always preached the "safer" loans, putting less risk on my clients and preventing them from feeling regret over purchasing a home.

Mike great post! In my opinion today what makes a great lender is one that will be at the closing table. I think it is not about having safe programs ABC and First Magnus had safe programs. It is about having the funds to close if you loose your credit lines. Right now WAMU, Wachovia, B of A and Chase all have this ability. The best part for me is that they all have wholesale sides that I work with.

Christopher - I like WF as well. Not so sure if they are any safer though. Interestingly, my WF rep is virtually non existent. Never answers the phone, never calls me back. Not happy with her at all. However i have a great relationship with my WF underwriter. He and I have talked extensively. He answers his phone, answers his email, and calls me back. He's the only reason I'll consider a WF loan.

Matthew - Very True. We live in a a very uncertain world today. The wholesale side is very important. As a mortgage broker when something like that happens (First Magnus for instance) it's a speed bump for us. It's a setback but we can move on to someone who will do the loan. When SCME closed the other day I fielded 5 different calls from my wholesale reps looking to pick up those pieces. But the Broker vs. Banker debate is fodder for another post on another day. Thanks Man!

Mike since I am not only an agent but mobile notary. To me a good lender is one that makes sure the borrowers know what they are getting into BEFORE they even have an appointment to sign and what they are told BEFORE they sign by the lender/loan officer should be the exact same thing that is on the docs when the notary get there to sign. It would be extra nice for the officer to be there at the signing but if that is not possible, there should be no questions unanswered prior to the signing. Then..... a really good lender should be open to -----it happens if times bring about something like what we are in now "the meltdown" and that same lender should get off the high tower and take accountibility for their lack of customer care and get creative on the other end of helping those same borrowers in their time of "mishap".

In other words, lenders that gave bad options out should have been more willing to work with the borrowers right from the start of meltdown and have a fall out programs that really help more people recover. Instead I felt the lender buried their heads and left their fingers up to point at other reasons why the meltdown is here. And they don't help with the short sale approval as they should, my 02 cents, and that should not be. That's my opinion of a good lender. From beginning to end be there for their clients.

Mike.... I don't care about name. It comes down to the loan officer. I don't care if my company's name was Mickey Mouse Surplus loans. Well, okay, maybe that name. But my point... it comes down to the loan officer, their knowledge, their integrity, honesty, how well that they can explain things, give you options and not just sell one type of loan that makes them more money, one who is very creative, and lastly.... one that communicates no matter if it's good or bad. One that is very accessible, by phone and or e-mail. (kind of sounds like the million dollar loan officer or superman)

Too many people get hung up on the name. Bigger doesn't always mean better. Service, service, and ??? oh yea, service. Sure, some companies can ruin it for a loan officer, because of their inside support staff. Bring this up to your manager, owner, etc etc... or leave. These are just my opinions. And yes, having a large array of loans is a necessity, but you need to know the ins and outs of them.

jeff belonger

i find the whole thing interesting... clearly this is a supply vs demand issue... If there is a demand for a product, lenders will have it available. There was demand. In fact there still is a demand for these type of loans.

The banks made BILLIONS on these loans and now they cry? LOL

They knew the risk. In fact, the built the risk into the pricing on these loans.

The problem is not that they were bad loans. It is that the L/O's got lazy. These were easy loans to do, so they pushed many of the wrong people into these loans. Besides the lazy factor, there was the greed factor. These loans paid the L/O's VERY well. Then the L/O would PROMISED to refi them later (REFI = More $$$)... when later showed up.... NO REFI. Due to large amount of foreclosures... caused by the public getting loans they never should have got!

The lending industry deserves some of this bad press. They need to clean up the mess they created, Educate and supervise their L/O's and become a Little less bottom line driven. They really should ask if the loans they are about to give are bad for the borrower.

LOL... don't get me started... oooppps to late

Mike,

This is Great, I have Friends that work at both WAMU, and Wachovia, and they say that they are told to sell the Heck!! out of the POA and thats just what they do. I wouldn't trust them just because they are a bank, Just like Jeff said it all comes down to who is selling the Product!!

Great Post!

Tom Weiss

I still can't believe how much people believe the media. They are so heavily influenced by it. This is a great post!

Mike,

Nice presentation, as usual! To me a good lender is one who in today's market is proactively seeking to place loans and stir up the buying pool!!! If they can do that, all the rest of us will make them look even better!!! Thanks, Fran

Sadly the public is misinformed on alot of issues, due in part to the media. If people would take what the media says with a grain of salt, the real truth would come out.

Congrats on your star, Mike! *^_^*

(I had to!!)

Great article, thx for sharing

Cool, Mike, and congrats on getting the feature. Have you ever noticed how hard it is to type on a laptop and think at the same time one has a bad case of the flu? What an ordeal...