Loan Officers Need To Qualify The Buyers Not Qualify The House!

Common problem - especially in rural areas. We have also sent buyers to a lender only to have them told, "Oh you don't want to buy that house, we have a bank client that needs to sell, go look at this place..." or "Don't go to a Realtor, we have a few foreclosures you can look at."

Banks and finance companies would LOVE to be in the real estate business.

What a mess???? I totaly agree with you... They should stick to what they know .... You have to wonder if they will do the best for the 1st time home buyers.... Are they informing them of all the programs that are available to them. I can't wait to see what will happen in the end... Will the buyers go with this loan guy or not....

To be fair, there are plenty of examples in my experience with real estate agents giving loan advice. On either side, there is a disservice and a betrayal done.

I do not think such practices will serve the puperpetrator well in the new market in which we all are better served to support each other.

Richard

I would make a written complaint.  So should the buyer.

Yikes!  That takes a lot of nerve!  I had a home inspector do something like that and I wanted to brain him!

Another reason to continually educate buyers and sellers as to the role of each players in a RE transaction.  Buyers are ultimately responsible for choosing their loan provider and the type loan they accept.  However, understanding what type information they will receive from loan officers will enable them to identify when they are receiving fact or just an uninformed opinion. 

Richard makes a good point above.  Let's abide by the rule: a lane for everyone, and everyone in his/her lane. 

That is so outside of their realm of "expertise". I can't believe that a loan officer would do that. They may need to know a few things about the house to figure out a program (like is it a single-wide mobile home) but they should most definitely not be giving advise about the price for a house unless they have viewed the appraisal and the appraised value is below the offer price. Even then, they should not give advise but state that they cannot lend more than the house is worth without the buyer bringing in the difference.

I believe I would call and ask that loan officer for his/her comparables? What did he base his pricing advice on? Since your buyers agent did that part, this loan officer needs to be put in his/her place. That was a big step out of line and over the line to advise a buyer, oh I'm furious just reading about it.

Several times I have gotten on a conference call with the loan officer and the other realtor when they were not my buyers, and we tactfully touched on the areas of concern and who has the responsibility in each of those areas.

That is an incredible story.  I never have had a loan officer get into advising on the price or what offer to make on a property.  Incredible.  As to the legislation, I really think NAR was asleep at the wheel.  They want all this PAC money, but they missed the boat on this one and as other blogs have mentioned, where is health care for Realtors!

Ok Katerina, now you really have me going! I was outraged when my buyer told me that, but didn't want to get into a debate over what the loan officer knew about real estate. I did ask if he was familiar with the home and/or the comps. As you know, I am still working with these buyers, and I am again urging them to go to one of our lenders-always giving them a choice of more than one. What the buyers need to understand is this is our field of expertise, we know what we are doing when we suggest an offer price, and we have the proof to back it up, but some people have to learn the hard way! Thanks for your support!

AMEN! I have had similar struggles with these "professional know-it-all wannabe's"  It is absolutely ridiculous. 

Wow!  I can't believe a loan officer would do that!  What makes him think he knows what a good offer is without even seeing the house?  Unbelievable...   :)

Wow, I can't believe a loan officer would do that. You are so right they don't know the details and should have stayed in their own expertise!

How sad.  Definitely goes to show that strong relationships with Good lenders are vitally important to a successful real estate career.  Over time, your CUSTOMERS will tell you who the best lender for you to work with is!  A lender really can make or break your career?

Subscribe to my blog "Donna's Got Money?" and I'll show you what good, responsible lending is all about and how a good lender can help your career.  Also join our new group "Got Money?" and add your opinions as well.

Thanks for a great post.

Donna Mitchell

www.donnasgotmoney.com

Blog:  Donna's Got Money

ActiveRain Group:  Got Money?

Katerina, Although we disagree about realtors also acting as mortgage brokers, we do agree that friends don't let friends do business with these big banks that act so badly. 

As a matter of procedure within your office, the buyer should be qualified before you show them anything. That qualification process will bring out these potential problems in advance. Your Buyer's Agent's time will not be spent in vain and the client will know he can actually close the transaction in the event that he finds something he likes.

I hope your buyer found something and bought it through your office. He definitely learned that his bank wasn't on his side.

Bill Roberts

In defense of loan officers!

There are many good comments here, and for the most part I agree with all of you.  Loan Officers should focus on loans and Agents should focus on properties.  To my dismay, I have many agents tell their clients that my rates are too high or my fees are too high and from time to time, I will lose a client over these kinds of issues.  It is totally unethical for a Loan Officer to suggest the price is too high or too low etc... It is also totally unethical for an Agent to get their hands into the pricing structure of the loan.  If you want to be a Loan Officer, then don't be an agent and the same goes the other way around.

In any case, there are many situation where I as a loan officer will have experience with a particular type of property or will have received a bulletin from some of our lenders asking us to be cautious of the loan amounts and values in particular areas.  In fact, there are maps out there with matrices showing the percentage of value lost over the past 12 months.  These are all general figures, but they are the issues we encounter every day.  I have had more appraisals bounced by underwriting because of the value being way off in the past three months, than I have in the previous five years.  As a loan officer, I am cautious about the loan to value ratios, especially with first time home buyers, because typically they do not have the money for a large down payment or the assets to support a larger size loan. 

After the news today, banks are going to tighten their lending standards even more, so dont get all over the Loan Officer for being cautious.  This particular guy was not very tactful in his approach, and he should be sent to training so he understands how to sell his deals better, but it may not be entirely his fault and he may have saved you a lot of grief in the long run.