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Bad mortgage lenders out there- BEWARE!!!

I had the occassion to close on a property recently that had been repeatedly post-poned due to financing issues. When the closing was finally in progress and I received the third HUD to review for my seller clients, I was mortified by what the buyer's lender was charging and making in fees. The buyer agent was new and did not know any better...but I tried to explain to her after the closing what a raw deal her buyers got (since they said that they were going to re-finance again in October). The kicker was the mortgage broker was her "friend". Practices like that are so maddening to me and I guess you could call me spoiled. Since my husband is a mortgage broker, I hate to see other people doing those kind loans that he would never dream of. I have a good mind to file a complaint against the lender. Then again, if it wasn't legally outside the limits of what they can make- would it do any good?

Posted by Stacey Matsuda on 03/03/2008 03:50 PM

Comments (7)

mortgage lending practices

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7 Comments on Bad mortgage lenders out there- BEWARE!!!

MAR

2008

Are you sure that it wasn't outside of legal limits? You should have said something to the borrower/buyer. There is nothing wrong with using your expertise and telling them on the side that you are witnessing a rip off. This market is competitive, but the guys out there that haven't done a loan in 3 months are going to take everything that they can instead of doing the work and building relationships with realtors.

I hate when I see this happen too. Recently a realtor/friend of mine asked me to review a GFE for her client and they were charging like $10,000 for fees, I asked her if they had built an addition on the house. I called the client and we closed and they are a client for life now. We can't save everyone, but we can try!!

Having been married to an attorney I know there is a fineline between what is right and what is legal. While making your money that way may be legal it certainly isn't right. With a friend like that who needs enemies!

Hi Stacey,

I know that in California, the loans are subject to a maximum amount, and if the lender sees the broker go over that amount, they will tell you to readjust your fees until you are under the limit. Until you do so, they will refuse to issue loan docs.

As for filing a complaint, I would. It probably won't do much, but at least others may know that they charge way to much.

Stacey,

My wife had a small company too (she closed this past December) and I agree that the fees for some have made all look like a problem....it is always nice to hear that the good far outweight the bad. Keep up the good fight.

I have not been bitten by the mortage problem....knock on wood.

Stacey- I'm always saddened by lack of reason and responsibility on a Mortgage person. Tough times will weed out quite a few of the bad apples but it also brings out desperate measures by unscrupulous individuals. I understand getting someone into a home to refinance at some piont down the road but it seems harsh to hit them with exhorbitant fee's and getting two deals out of it - yikes.

Good luck to you and your husband.

stacey at this point i believe they are all bad! At least the ones that are left. :-)

I would question if that agent really didn't know any better. If not, I hope she never uses that friend again. If it were me, I would call that friend and let them know that I don't appreciate them taking advantage of my clients. Especially if I was that new in the business. She'll need to rely on their future business. Once the buyer finds out they got ripped off, they won't want to work with that agent in the future!

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