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Must Read- Today's Sun Sentinel Article About us Horrible Mortgage People

By Cheryl Hale

Mortgage and Lending with SMP Mortgage, Inc NMLS ID #276668

October 28, 2007 12:01 AM

What a way to start the day! I wake up and check my google alerts and this article is the first thing I see.

Reporter Harriet Johnson Brackey makes some rather general uninformed and misleading comments about mortgage brokers and loan officers, pretty much slamming our profession.

She states that the mortgage crisis has been caused in part by mortgage brokers who put people in more expensive subprime loans because the commissions were higher.

Oh, please....subprime loans didn't come with additional commission incentives

She also states that consumers cannot necessarily rely on a mortgage broker for information... because all we need to set up shop is a weekend course...

"Don't rely exclusively on the mortgage broker for information. In Florida, you can get a mortgage broker's license if you take a $200 weekend course. For that, anyone can be qualified to sit across the desk from someone making what's likely to be the most important financial decision of his or her life. Or, if your mortgage broker works for a bank, he or she doesn't have to have a license at all."

True, it only takes a weekend course and a passing test score to get a broker's license. When I started in this industry, I had something called training. I had experienced people to back me. I didn't just take a course and hang out my shingle so I could sell bad loans to unsuspecting consumers.

Here's a link to the article

Home buyers can learn from others' mortgage mistakes

If this article makes you mad too, send her an email hjbrackey@sun-sentinel.com or post online on the forum. Let's indunate her mailbox with the reality...we're not all slimebuckets. We work hard to stay on top of things in our industry so we can offer our borrowers the right programs to meet their needs.

We're decent, honest people with homes and families and pets, hobbies, worries and stresses just like everyone else. Last time I looked, I wasn't sitting on my yacht gloating about all the money I made by putting people in subprime loans.

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Tina Thimlar

Century 21 - Saint Marys, GA

Southeast Georgia Real Estate

I think the article was just meant to inform people about those who ARE out there with predatory lending. Those brokers who are on the up and up should not fear her article but rather use it as a tool to say to your buyer "I'm glad you came to me, I'm not one of those brokers".

Oct 28, 2007 12:06 AM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

You just did the very best thing. You brought attention to her ingnorance.

Her advice to borrowers?? "Do your own research".

You gotta love it. If they knew what they were doing, they wouldn't have gotten the loans they got in the first place. How are they going to understand "reserch"?

Fact is, most of the folks who took out risky mortgages expected and planned to flip the proprties they purchased in a year or two. When the demand for real estate ceased and appreciation stopped, the owners are stuck with properties they never should have purchased in the first place.

It was a perfect storm for a mortgage disaster, rising interest rates, rising home prices and stagnate incomes.

Folks got exactly what they sought, easy loans. They took the risk because they planned to flip the properties anyway.

Oct 28, 2007 12:14 AM

» Bill Burress Nationwide Mortgage Originator

» Bill Burress Nationwide Mortgage Originator - Fort Myers, FL

Hey Mortgage Lady:

Good post. I will send an e-mail to her today. All they want to do is sell newspapers. Negativity sells. What do you think about Businessweek trashing the Option ARM loans and then coming out later saying its the best loan? On top of that. The articles were written by the same person. What?

Oct 28, 2007 01:07 AM

Cheryl Hale

SMP Mortgage, Inc - Plymouth, MI

Mortgage Loan Originator NMLS#276668

Tina: Her intent may have been to inform, but her comment about the subprime loan commissions was inaccurate. Certainly borrowers need to be aware when making such a huge financial decision, but in my opinion she made it sound like we are all a bunch of greedy unprofessionals. I don't fear her article.. I can go to sleep at night knowing I have done the right thing for my clients. I am concerned about how the negative reporting affects our industry and economy as a whole.

Lenn: "Do the research"..so many borrowers do the research by asking "what are your closing costs?" or they talk to their neighbor who just refinanced and think they know everything

So true about the investors who wanted to make a fast buck, but jumped in to the boom too late...I know of someone who is stuck with 3 properties with rents that don't even cover 1/2 of the mortgage payments...

Bill: I'm working on my email too. I didn't see the Business Week article..I'll look it up. That's interesting that the same person wrote two articles with different views. What ever happened to unbiased reporting, both sides of the story and presenting the facts??? Sometimes Option ARM's are a benefit to the borrower, and sometimes they're a lousy choice..depends on the situation.

Oct 28, 2007 01:51 AM

Tina Thimlar

Century 21 - Saint Marys, GA

Southeast Georgia Real Estate

I don't think the negative reporting should affect the industry with the exception that possibly it will wake up those unsuspecting people and make them ask the right questions so that they don't get burned. We in our area however have seen more and more buyers going directly to banks instead of these little fly by night mortgage offices that come and go. Real estate as a whole has much negative publicity but hopefully that's gonna stop soon.

Oct 28, 2007 10:17 AM

Cheryl Hale

SMP Mortgage, Inc - Plymouth, MI

Mortgage Loan Originator NMLS#276668

Tina: I agree that consumers should ask the right questions..and a lot of small shops have floundered with the lack of loan programs for their borrowers. I hope the negativity will stop soon too.

Oct 29, 2007 08:34 AM

Kevin Hancock

Evergreen Home Loans NMLS 3182 - Poulsbo, WA

The Hancock Mortgage Team

I agree that all of the negative reporting is a major "downer" on the business, but all we can do as professionals is keep our head up and keep helping customers. I don't believe that lenders caused the "crisis", and I don't think most journalists understand more about home loans than any other sector of the population who doesn't work in the business. Just stay positive!

Nov 05, 2007 08:42 AM

Cheryl Hale

SMP Mortgage, Inc - Plymouth, MI

Mortgage Loan Originator NMLS#276668

Kevin,

You're right about staying positive. My clients have always trusted me and still do. It just burns me that a professional journalist would print comments that are based on ignorance..I thought their job was to research and present facts???

Anyhow, I'm still here and staying positive.

Nov 06, 2007 12:05 AM

Charlotte Home Loans Your Charlotte Mortgage Lender

Charlotte, NC

In NC the course is only 8 hours. But to be successful in this business and have any clue what you are doing, it takes a solid year of hitting the wall to get grounded and know what you are doing. The retail guys at the bank with no license only know what the training manual says, and I would bet that most of those manuals just tell them where to put the information on a 1003.

Nov 06, 2007 03:26 AM

Kate Bourland

Marketing with Kate - Redding, CA

Onlilne Marketing Mobile Marketing

I have to wonder how much time she spent educating herself on the issues of this story. Less than a weekend course I bet.

Nov 06, 2007 03:36 AM

Anonymous

Patrick

Dear Experts -

What basic questions should be answered and understood for Any Given loan a Consumer obtains?

Nov 07, 2007 01:02 AM

#11

Cheryl Hale

SMP Mortgage, Inc - Plymouth, MI

Mortgage Loan Originator NMLS#276668

Hi Patrick,

Some of the basic questions should be:

What type of loan am I qualified for and why? The mortgage broker/loan officer should explain what qualifies someone as an "A" paper borrower. Then you can see how your situation fits in with that scenario. If you don't qualify for the "best" rate, you will know why.

How are you making commission on this loan? A lot of mortgage brokers/loan officers may not like this question, but an upfront mortgage broker will not hesitate to tell you. Just remember that they don't work for free and are entitled to be paid for their work. A lot of time and energy is put in to a loan file, especially if the loan is a difficult one. A typcial mortage broker may earn 1-2% of the loan amount. This can be earned in commission paid by the lender, as an origination fee, or a combination of both. Sometimes they may charge a higher fee if the loan is a particularly difficult one that requires additional time and research. Also, the mortgage broker does not keep the entire fee - typically 50% of the fee is paid to the employer to cover overhead, advertising, compliance costs, etc.

Ask what different loan programs are available to fit your goals. Maybe an interest only loan would be better than a 30 year fixed for example - it depends on your situation. Ask about the pros and cons.

Ask about the terms of the loan being proposed - is there a prepayment penalty? An interest rate adjustment? Will the payment ever change ? Does the payment include taxes and insurance?

Ask to have the settlement costs explained.

The most important thing is to work with someone you trust and feel comfortable with. Don't be afraid to ask the same question twice if you don't understand something.

You should be prepared to spend about 1/2 hour or more in a consultation with your mortgage broker/loan officer. Answer all questions accurately and honestly. Talk to them about your financial goals. Seeing the whole picture helps the mortgage broker present the bet options for your situation. You can't get an accurate assessment of the type of loan you qualify for with just a credit report analysis and telling how much your salary is.

Do not rely on the advice of people who are not in the business - just because your neighbor recently got a mortgage doesn't make them an expert. It may be helpful to hear about their experience with the process, but every loan is unique and will not have the same set of circumstances.

I could go in to a lot more detail, and in fact, Patrick, you've given me a great idea for a future blog post:)

In the meantime, if you'd like more information, don't hesitate to contact me, or any of the other folks on Active Rain, or search the blogs here - lots of great information on mortgage basics.

Nov 07, 2007 02:14 AM

Cheryl Hale

SMP Mortgage, Inc - Plymouth, MI

Mortgage Loan Originator NMLS#276668

Ed: Here in Florida, the course is 24 hours..but it mostly covers RESPA and banking laws. Important for sure, but like you said, it takes a good solid year.

Kate: Loved your comment about how much time she spent educating herself! Seems more like of rehash of myths

Nov 09, 2007 04:01 AM

Esko Kiuru

Bethesda, MD

Cheryl,

Looks like some reporters just keep on repeating the same story month after month when they have nothing else to report on. Many of them really don't understand how the subprime mess developed, so they shouldn't even write about it. Shame on her.

Nov 09, 2007 01:53 PM

Cheryl Hale

SMP Mortgage, Inc - Plymouth, MI

Mortgage Loan Originator NMLS#276668

Esko,

I agree. While there are so many factors involved, I think one of the s biggest problem here is not the mortgage originators. but those 2/28's and the prepayment penalties.

Nov 09, 2007 07:18 PM