jeff, i hear it all the time. an inexperienced loan officer can really mess up the loan.especially these days when programs & guidelines are constantly changing.

Bravo Jeff.  My most referred lender representatives are those who know their stuff, don't lie to me or my clients, and provide honest and ethical service.  Big or small companies - doesn't matter.  AT ALL.

Jeff  - Right on Brother!  I suggest to everyone that they take a minute to read the RED FLAGS post.  Good stuff!

Unethical loan officer should not be in the business anyway and most lenders state licensing regulators are screening to weed out such loan officers. I agree that you still have to make sure you are working with an LO who is ethical.

Jeff,

I thought this would be a 'play on words post'...like, 'Size doesn't matter...if you're with 'Be longer'!!! :) Thanks,   Fran

eff:

This is great advice to keep in mind. I have worked with some terrific loan officers at some small, lesser known lenders, adn some terrible folks at very reputable lenders. It really seems to be more a factor of who you are working with (their knowledge, competence, customer service) than the actual lenders, wtih some exceptions of coures.

The West Coast Jeff

How unfortunate for that buyer!  You made really valid points.  As an RE agent I always give buyers the cards of 3 mortgage professionals.  It's amazing to me that time after time most of them select the same (small) brokerage.  I know why though... they are smart, friendly, honest and they CARE about every person we send up there. 

ALISA.... I am sure you hear it more than anyone, since you are a closer. I hear it often also, not just in a form of an e-mail either, but because I speak to many title clerks often.

KRIS.....  exactly, it doesn matter if the lender is large or small, or has a name that is seen on TV often.  This is not like buying a car, where all the cars are built out of the same plant, and then sold by dealers competiting against each other. And I think many consumers fall into that kind of thinking.

MIKE....   I didn't know that we were brothers....  ;o)   But I wouldn't complain.   Thanks for that great link and the compliment.

HANS.... well, that would be to easy, if they would be kicked out of the business. But that doesn't normally happen. What this consumer needs to do is complain to the builder, the state, and her company. Maybe she has had complaints in the past.  Enough of these could get her fired or out of the business. As a Consumer or a Realtor, should you complain?

FRAN....  I had actually thought about that.  But many should have gotten the general idea when reading the title of this post.   But that could be a side post.  thanks

JEFF D. ......  we both agree on everything that you mentioned.  And can you blame the consumer sometimes, not realizing this or not able to figure out which is the best for them, especially when a builder is dangling money in front of them?  thanks for the compliment.

KATHY..... yes, very unfortunate.  And I get at least 1 to 2 e-mails like this a month.  Hey, it must be hard to shop for that good loan officer, but buyers need to pay attention to some key terms, which could be red flags. Many of these loan officers are just order takers.  "Who is next?"

Jeff, it should always be about being a professional, unfortunately the public sees the big name and assumes that they are getting professionals

"in the process of becoming an FHA lender" does not sound promising.

I am a notorious brand name shopper. When it comes to shoes. Financial services and business advice are not something you should shop for on a name brand/big company basis. Deal with people you get answers from that you understand. Quite frankly I prefer to deal with smaller companies because I feel like I am a person not a number and I figure they'll work harder for my business.

Well done......    consumers rationalize away those red flags... because they lose sight of reality when they are being made promises from lender just to get the loan.  

Hope all is well with you

Size Does Matter!

You named three of the biggest.

So big that they either don't care or can't control their members.

 "We are the biggest, nothing else matters!"

"We are the biggest, nothing else matters!"

Sounds very juvenile doesn't it?

Inexperience regardless of size, is inexperience. When people select their lender by the size  instead of the integrity of the individual LO, more often than not they get what they deserve! (Integrity not experience! So many people in real estate and lending claiming 10 years experience, actually only have 6 months experience 20 times!)

Even the smallest can get the job well done,

not even the biggest can do any better.

 It's performance not size that counts!

Good post! Very good.

Bill

That is right, CW has been messing up so many loans here in town... It just means that I can come behind and close more loans for these Builders and unexperianced LO's.......  They are weeding them selves out of the business.......

Jeff, I love the post!  I hope this gets featured on every board in AR.  This is so important!  Thank you for writing this post.  It needed to be said and you did a great job describing the scenarios.  Now if we could get this into the hands of every homebuying in America! :)

Kudos Jeff!

As a small mortgage banker I hear the same stories (and rescue the blown apart deals!) constantly. There are a couple of notes I'd like to add though:

-Experience is the most common denominator for finding a good Loan Officer. If they have been around long, they tend to know more and have a longer-term view towards their business.

-Always ask someone how long they have been a mortgage lender. You normally wouldn't hire someone without a resume. Why hire your LO without one?

-Anyone can spout BS. Ask them how many different loan programs they offer, and if they are HUD/FHA approved (the better ones will always be).

-Utilize resources like this site to weed out misinformation. I'm fairly certain I speak for the whole site when saying we stand ready to inform anyone looking for facts!

Now I must say I disagree with you somewhat on the lender mortgage company comment. As a lender who has targeted the builder community for over 15yrs now (been lending for over 21 years) I am on the approved lender list of every local builder in my area. Many chose to pay closing costs and refer their business primarily to me because:

-I have earned their trust and they know I will take care of their customer, which makes them look good.

-I am familiar with their business operation and an expert at new home financing complexities that makes deals close smoothly, which saves them costs.

-I am very active in the Homebuilder's Associations and work diligently to support their causes. This puts me in touch with many builders on a personal level and demonstrates my work ethics before we even do the first deal together.

That all said, I do agree with you that "builder owner lenders" do have a reputation of charging higher fees/rates than their competition. More importantly I have consistently witnessed decreased levels of customer service from builder owned lenders stemming from the "captured audience" syndrome they seem to have. Would you agree Jeff?

Thank you for all the very interesting posts though. Your knowledge and experience are obvious and it's nice to see how eager you are to share them.

Nice post Jeff --

I too hear that all to often. And who pays for this crap?  We all do...   There ought to be a law................

You really think any builder owned mortgage companies will be around much long? Or how about builders for that matter?  It's gonna get worse............... I have been away from AR too long....  nice to see many of the same names still plugging along

Jeff:

As always....... quite a great post.  I know it gripes you for someone to just stop by and say that, but it's true. :)

Great Post Jeff, I'd like to key on another excerpt from you post that drives me CRAZY.  They chose to use the builder's lender because of a 10,000 discount for doing so.  My never to be humble opinion this is steering.  too many times that 10000 is just added to the price before the discount and the consumer is so elated with the 10,000 discount that they completely miss that the rate and fees is much higher with the chosen lender.  I lost 3 nice loans this spring to the big national builders with their affiliated business arrangements.  It's tough to compete with the Huge Incentives.  The playing field should be level regardless of the size of the lender or the relationship with the builders!  Check out the majority of HUDS settlements in the past few years... Builders with affiliated mortgage and title companies

.   

Jeff - I still think your RED FLAGS post is one of the more important posts from the mortgage side of things I've read.  As far as what you laid out here, many kudos my friend.  You hit the proverbial nail ... right on its shiny little head.

Jeff, In spite of all that's happened, I think people still trust whoever they're dealing with.  They need a true professional who knows about loans and is caring enough to do the right thing for them.  I know you would do the BEST for anyone lucky enough to contact you.

Absolutely,

I deal with some who write mortgages and many more mortgage professionals. I prefer the professional and see the difference in the borrower's confidence between the two.

Jeff,

What criteria are available to a consumer to select an ethical mortgage originator?

In your example, the home owner had selected a builder, and followed that builder's recommendation.

Countrywide is a well established company and could legitimately advertise being the nations top originator, despite current attention, and evidently some Senators are feeling some heat over Countrywide. Such success might imply to a borrower that the company and their loan officers have a minimum level of legitimacy.

I see on AR blogs of loan officers, descriptions such as "honest". Should advertising honesty be used as a selection criteria for finding an ethical originator.

The question always comes to my mind, why do you have to tell me you are honest, can I not tell by your actions and your reputation?

What criteria? advertising, website presentation, explanation of the process, terms.

How does a shopper know whether they are speaking to an honest originator? By the rate quote, by the quality of questions asked of the shopper?

These are the thoughts that came to my mind, as I read your post.

Because, evidently, you have just established that a referral recommendation is not necessarily a dependable measure of the level of ethics in an originator.

What is a consumer to do?

Thanks,

Richard   

I still can't believe the number of people who think they can 'cut out the middle man' by 'going direct' to wells/wamu/ect

In this day & age of Mortgege Transparency.... you would think they would understand better.

I thought this market had pretty much gotten rid of the unethical ones.......tough times cause massice amounts a=of attrition. In scatter like flies. Tne good news in all this that as long as we continue to keep doing the right think and keep presenting ourseves to our audience /consumers that we are professionals, it will always come back to us in aces. There is no substitute for being professional. Integrity or the high road is always the best way!

BTW, having customers do these types of thing probably gets in our craw, but the truth is, if we do the right thing all the time (which you clearly do, Jeff, et al) then if we understand the numbers part of what we do, we simply move on and the truth os the matter is the customer loses. We can't save them all

Some loan officers complain that their applicants always lie to them -- they shouldn't be writing loans.

Some borrowers complain their loan officer didn't handle them well -- there are inexperienced people writing loans.

My comment:  In the initial interview, both parties should have a good feel for the forthrightness of the applicant and the knowledge of the loan officer.  Unless both parties can forge some semblence of trust from the get-go, somebody's gonna walk away unhappy -- and underserved -- and, it'll likely be the borrowwer, unfortunately.

Hi Jeff: Nice post. I agree with you. I always tell the borrower they should meet with at least one loan officer to get a sense for what they know. That seems to always separate the wheat from the chaff! Have a nice weekend!

Paul

that is classic Jeff.....a gut feeling....wow....I like the post

Jeff, you really touched a nerve with me.  My very first closing the lender suggested I settle with a seller about repairs outside of closing.  Luckily my BIC was in the car with me and heard the conversation.  I was stunned.

Great post...Suzanne