Because I have so much respect for so many of you here I had a difficult time writing this - but it's a huge background noise among lenders and brokers. I mean it, seriously, I respect you guys very much and admire the majority of you more than you know. I guess you know I'm prefacing something not so pleasant. Let me say this is a time for us all to work together and I truly want whoever reads this to have an incredible weekend!
Let me also preface with this: These words were very difficult for me to write and publish. Everything I do in this industry revolves around the client. If the client is not satisfied then I have failed in my job. Even when the client is uneducated and limited in home buying experience it is my duty to see that my employees treat them with respect and concern. Ask anyone who has every worked for me even if I terminated them they will tell you it is always Customer First.
I do not think, nor do my employees think, that all agents are like this series of events I am about to recount. Likewise all Loan Officers are not uneducated, greedy thugs who play putt-putt at work while they wait on those huge commissions to roll in. There may be a short one in Texas but he's rare. Please understand the point of my blog is to bring this to attention and make it a point of discussion. It is for leaders in the industry to take note and agree to do something about this attitude which, to your chagrin and mine, is all too common. I know how common it is because after closing several thousand loans I have dealt with it first hand and as an industry leader.
Not wanting to end my week on this note I will now vent and offer a challenge and state my campaign focus for 2009. I know a lot of you are not going to have favorable comments and there will be some feathers ruffled but this is something that, for as long as I can remember, has needed to be addressed on a global scale. Here goes:
I was just briefed on one of the nastiest encounters my office has ever had with anyone (buyer, seller, agents, broker, attorney, appraiser) since the day we opened. It seems the listing agent on a closing yesterday was very upset that the buyer did not use "her lender" to close one of my loan officer's old school friend's loan and did everything she could to make my loan officer and my company look bad in front of the other agent, the buyers and the attorney which we have never used. As far as the loan itself we compared GFE's and beat the "agent's lender" significantly on pricing and it was a very VERY difficult (and relatively small) FHA loan. The agent continually bashed us to the borrowers and got them all freaked out during the process. She harassed my loan officer from day one. I won't go into all of the details but I just listened back to the phone conversations (yes, when we say this call may be recorded we're not kidding) and this woman was extremely hateful and nasty from the very beginning.
It got worse...
At the closing table she made a completely rude and horrible scene in front of the buyers, the sellers, the attorney and the loan officer. She complained about every little thing including how long it took to close (16 days from the day we received the application - 11 days from the day we received the contract) and how horrific our fees were. She lied about her performance in the industry to try and make herself look better and verbally attacked my loan officer about our fees AT THE CLOSING TABLE. She repeatedly brought up how much better her lender would have done with the loan - you can only guess how I feel about that.
God bless the little 88 year old wife of the seller who said (and I paraphrase hearsay), "Honey, you've said about enough and if you don't want me to start on you about your commission and the way you have conducted business here you need to just sit back and relax."
I love real estate agents. My baby sister is one, my niece is one, my nephew is one and many of my best friend's are agents. I even used to own a real estate company and had wonderful experiences with all of the associates and agents. Today, all of the agents with whom I and my loan officers have a relationship are fantastic to work with and are invited to my home and our social events regularly. I won't let one moody little serpent ruin the punch bowl but I do think this needs to be addressed. In fact I have never required my LO's to go to the closing because this is so often how it turns out with the seller's agent.
Maybe there is a class that gives CE's for snotty attitudes from listing agents? Or was this lady just ticked because she wasn't getting her normal kickback from the Loan Officer?
Because of this very experience occurring a many times over the years I have my Loan Officers communicate only with the BUYER'S AGENT and only with written permission from the buyer on OUR form. We ask that the LISTING AGENT either contact us only once per day (not 7 times, not 4 times) or get their updates from the BUYER'S AGENT.
This isn't being written because it is a rare instance - in fact it is relatively frequent. Buyer's agents are almost always very co-operative and understanding and seller's agents are frequently not. I really want to know and understand why and fix it. Nobody on my staff is a rookie, we're not a "tiny" hole-in the wall company - we're a top performer in the state and our pricing beats every major lender or bank we know of. Our turn times are average and we have all sorts of communications tools and every conceivable mortgage solution available.
While reviewing, today, every encounter I have ever had with a broker about doing a marketing partnership I have become more determined to demand industry changes. Adding to that the things I have just learned from one of my ex-employees who went to a MAJOR national lender but returned to us I am even more determined to campaign for RESPA enforcement. Evidently there is something called an MRA or MSA which is an agreement this lender creates with real estate agents and brokers. If the loan is closed with that lender the MRA/MSA gets $500 to $2000 as a marketing agreement (here-say). In addition to that, as a Director of my company, I have been asked to pay as little as $5000 per month for a 350 square foot office and one of my reps was just asked to pay $18,000 per month to have an office in a big local brokerage!
(Interjection: I let a friend read this earlier today and asked him if he thought I should post this or not. He said POST IT! He's an agent. he is a prominent member of AR. He also asked to know more about these MSA's or whatever they are called. I don't fully understand them but from how it has been explained to me by an employee of the major national lender who inherited and uses them is that the agent and the loan officer enter into a marketing agreement and the company pays the marketing fee to the agent as a result of clients being referred to that lender and closing with that lender. Find an old HomeBanc employee to explain them to you.)
I guess I am weary from the battle. We're still open and still closing loans but having to deal with this insipid grief every day is really breaking my back. If nothing else it's the shear lack of respect many agents give to Loan Officers. It's why I have such a difficult time getting LO's to try and contact agents to tell them about the exclusive programs we have - they don't like being "snotted on" for a lack of a better phrase. Are there LO's that don't deserve respect? You bet. Are there agents who don't deserve respect? Obviously. But this is SUPPOSED to be about the CLIENTS. When things like this happen the poor client gets caught in a web of venom and disdain and leaves with a bad taste of the whole home-buying experience. And for these unfortunate folks it was their first time buying.
Is this an attack on everyone who is an agent? Heaven's no! Is it an attempt to say LO's are always right and agents are always a pain? No way not at all. It is a PLEA for BROKERS and MANAGERS to address this situation with the agents who use that company's and brokerage's name. Not even for the sake of the LO who busts their butt these days to get even strong loans funded but for the sake of the CLIENTS who get caught in the crossfire.
HERE IS MY CHALLENGE: Loan officers, all of you, and lenders, stop breaking the law by paying exorbitant fees in violation of RESPA. Big national lenders you know who is doing this and I am going to start pressuring for investigation. In fact with all of the activity in the southeast (allegedly) from HomeBanc and some very large RE companies I can't believe there aren't people who have lost their license forever and maybe even served a little jail time. Loan Officers STOP breaking RESPA by rewarding agents for sending leads to you - you are not a PART of the problem you are THE problem. BROKERS (RE BROKERS) stop violating RESPA by demanding your agents refer only to the associated broker who is paying your office rent or who have figured out another way to loophole a kickback to you. You, too, are THE problem and it's our wonderful clients who are suffering.
Brother and sister, I know this isn't going to win me any popularity points because it is going to hit some right between the eyes. Frankly, I don't care. I have dealt with this snotty attitude long enough, I have missed the opportunity to provide top notch services for some of the best buyers and agents in the nation and I'm fed up.
As soon as I finish my campaign to save buyer's and owner's ability to get a loan my campaign will be full force to demand investigations into lender/broker relationships and to demand a cessation to kickbacks, payouts and payola. It's a cancer in our industry and drives a wedge between the sales side and the finance side. You are either my friend or my enemy on this so please let me know with your comments.
And either way - do please have a wonderful, relaxing weekend. I'm going to go take my beautiful wife home and make her a nice candlelight dinner for her birthday.
See you at the polls in November. I dare you to vote for inexperience in a time like this.
THE OPINIONS IN THIS COMMENTARY ARE STRICTLY KEN COOK's PERSONAL OPINION AND NOT REFLECTIVE ON ACTIVE RAIN, NOVATION MORTGAGE, or ANY SPONSOR OF THIS WEBSITE.
EDUCATION BEATS LEGISLATION EVERY TIME. Get your clients, friends and family members to a LENDER RUN home mortgage seminar as soon as possible.
Copyright©2008 Ken Cook. Georgia and Florida real estate investment loans, FHASecure and FHA Home Loans, nationwide commercial hard money and small business loans, non-recourse loans for real estate investors
Novation Mortgage, 2501 E Piedmont Road, Suite 201, Marietta, GA 30062 Georgia Residential Mortgage Licensee 20014. Florida Mortgage Broker Business MBB 0703760 FHA Lender - Equal Housing Lender
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