A New Loan Officer, You Should Be Scared

I was handed a business card yesterday from someone I knew.  She said this is my new business with a big smile on her face.

She was a loan officer, with an out of state lender.  Oh Boy! (I am being a wise guy here)

  • Me: I asked why didn't you go with a local lender?
  • LO: Because we can do loans in all 50 states.
  • Me: Do you understand the problems with an out of State lender?
  • LO: Not a problem it is an advantage.
  • Me: None of the Realtors I know will work with or recommend an out of state lender because of along list of problems.
  • LO: I have never heard that.
  • Me: How many Realtors have you worked with:
  • LO: Hundreds.

Red Flag ContractThat made me stop and think.  I better leave that one alone.  The ink on her business card was still wet and she was only doing this part time.

  • LO: Who do you use now.
  • Me: I gave her 3 lenders in our area that I deal with the most.
  • Me: Do you do VA?
  • LO: I find that no one wants them. (Code for no we can't)
  • Me: Really why do you think that is?  (I am feeding her a little more line)
  • LO: No one wants them because they take too long and cost way too much.\
  • LO: Have you done any VA deals before?
  • Me: About 70% of my business.
  • LO: Oh
  • Me: VA loans are usually done in 2 to 3 weeks.  Mainland lenders usually take 5-8 weeks if at all and with many more complications.
  • LO: We are always faster than VA.
  • Me: Who do you run your loans though?
  • LO: I use CW and a few others.
  • Me: How long have you been doing this?
  • LO: I just got my license.
  • I thought I better let that go too.

Let's Recap

  1. She is brand new in the business. (possibly never done a loan yet).
  2. Works with 100's of Realtors, who do not have a problem with a mainland lender/broker.
  3. Usually runs her loans through CW.
  4. Finds that no one likes VA
  5. She can do her mainland loans faster than a local loan officer can do a VA with automated underwriting or any other LO in Hawaii history for that matter.
  6. Most importantly her total investment to be a loan officer is $200 or so for the license, no training and a set of business cards.

This is why it is a good idea to get referrals from top Realtors in the area before selecting your loan officer.

 
This post has been included in Hawaii Information

45 Comments on A New Loan Officer, You Should Be Scared

Randy,

I'm sure you knew I would be stopping by to throw in my 2 cents on this. It sounds like a very sceptical story. lol!

Every state is different I have been involved in only 2 VA loan deals and both times I was the listing agent...they did close with very little problems..but you are talking the old days and if I recall they closed in around 30-35 days. As far as this LO you met with..you are a big boy and I'm sure you can figure it out yourself.

05/14/2007 01:47 PM by Neal Bloom-Realtor ® Assoc.-CRS-Weston FL (RE/MAX Premier Associates)


Did you just hear a real loud whistle? That was me all the way from FL. How far were her feet off the ground when you left her hanging?

05/14/2007 01:47 PM by Lysa Napolitano, Call Coordinator ~ Century 21 Sundance (Century 21 Sundance)


Randy,  I wish I could write some words of wisdom.....You can always have fun with this person and throw a scenario by her and see what she says.  I always try to stay local much better that way.

05/14/2007 01:51 PM by My Favorite Mortgage.net - Matthew J Blum


We stay as local as we can.  If I can't run to their office, then I don't want to deal with them. 

On one of the very first transactions we ever did our buyer used E-Loans.  They took forever to get everything together, were next to impossible to get a hold of when we had questions, and did not keep us informed of the progress of the loan.  Throughout the ordeal, our buyer learned many things, but the most important thing was that he would never use E-Loans again.

05/14/2007 02:30 PM by Jim & Maria Hart ~ Charleston, SC Real Estate (Agent Owned Realty)


Local lenders really care about each transaction because they're going to have to deal with you again.  I find that makes all the difference.

05/14/2007 02:39 PM by Sarah Cooper (Real Estate Shows)


Neal - I felt it was worth sharing with the group.  With all the conversations we have recently had on licensing of loan officers, I felt this was a good example of what is wrong.

Lysa - Too funny, I am sure she we do well with the area Realtors.  LOL

Matthew - It would be too easy.  I decided to back down and let it go.

05/14/2007 02:41 PM by Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)


Jim & Maria - I have seen nothing but pain with out of state lenders.

05/14/2007 02:53 PM by Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)


Randy, So I guess you won't be throwing her any business? Well at least she's out trying to get business.

05/14/2007 04:36 PM by Bryant Tutas-Tutas Towne Realty, Inc


Randy,

I guess you really busted her!  Obviously not the sharpest tack in the box.

Lucky :)

05/14/2007 05:13 PM by Lucky Lang, Davenport, Iowa Real Estate (Mel Foster Company)


Lucky - The sad thing is I meet people like this all the time.  They are so lost they don't even know what they don't know.  And shame on the companies who turn them loose on the general public.

05/14/2007 05:31 PM by Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)


Randy,

I guess you and I will have to reinforce this every now and then.

05/14/2007 05:42 PM by Neal Bloom-Realtor ® Assoc.-CRS-Weston FL (RE/MAX Premier Associates)


Randy,

What an interesting post.  I'm sure you had a "fun time" with that new LO.  Unfortunately, I've been there and all of us have too.  It's hard to be new and get business!  But concerning VA loans, I find it funny that "no one" wanted them - I'm a vet, much like the millions of us out there that benefit from these loans.  Like you said, she probably didn't have it available OR was just clueless on how to do them. 

In my state, the process of how LO's can be licensed just changed (yeh!).  No longer can a green horn pay their money, pass a background check and then VIOLA your a new LO.  We're one of the few states that have pre-licensure requirements.  It will be nice when the rest of the country gets on board. 

05/14/2007 07:10 PM by Doug Capps, CRMS, MRMS (Fairway Independent Mortgage Corp.)


Bless her heart.  She must have been the loan officer who was advising the illustrious listing agent in my blog post...the one who wouldn't work our offer because it was VA.  Hopefully she doesn't hurt anyone on her way out of the business.

05/14/2007 07:57 PM by Leigh Brown Charlotte NC Broker/Owner (RE/MAX Signature Properties)


Randy, that is pretty good, she just started and is already working with hundreds of Realtors. I hope you were rolling up your pant legs during that conversation because it was getting pretty deep......LOL 

05/14/2007 08:16 PM by George Souto (McCue Mortgage Co.)


Good for her, she seemed to over come all of your objections, to bad she forgot the truth.

05/14/2007 08:26 PM by Rosemont Financial Inc


Doug - From your lips to God's ears.

Leigh - I have a saying. If the loan officer tells you they have a better deal than VA.  They do not have VA and they are lying.  Get a good faith estimate from them and I will send you to VA lender to do the same.  In the two cases where the client came back, it wasn't even a close call.  All of the others just went to the loan officers I recommended.

George - I was wearing shorts and they weren't high enough.

05/14/2007 10:32 PM by Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)


Sounds like a brokerage sold her on their version of things and she bought it, hook, line and sinker!  She's going to have to learn the hard way.

05/14/2007 11:07 PM by Lisa Hill (Daytona Beach Real Estate) (Adams Cameron and Company)


Randy I try to never work with lenders that are not local - it gets too complicted and frustrating they have no idea of the market here and have no local contacts for appraisers they never close on time, then tend to over promise and under deliver

05/14/2007 11:20 PM by Central Oregon Real Estate | Thesa Chambers, Broker (RE/MAX Sunset Realty La Pine)


Lisa- It is a cold world out there for the untrained.

Thesa - They also never seem to care.

05/14/2007 11:25 PM by Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)


Randy - here in CA as with I'm sure many other states you don't even have to have a valid license.  You can work unlicensed if the broker has a CFL license.  I know of a local company that has 40+ loan officers on their roster, yet DRE only suggest one person there has a real estate license!  Scary, eh?

 

05/15/2007 02:24 PM by Mike Mueller (Patagonia Finance)


Mike - That is beyond scary.  These folks are messing with big bucks.

05/15/2007 04:27 PM by Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)


Randy - I can just see you keeping a straight face throughout this discussion!  I would have been ROFL......!

05/15/2007 07:25 PM by Tony Marriott, Associate Broker, CRP, CLHMS, CRB, CRS ~~ Phoenix Arizona (Keller Williams Realty Professional Partners)


Randy -  The more LO's like that there are on this island, the more business I will get!  I am glad that she is new, otherwise her comments were pretty disturbing to hear. 

05/16/2007 12:30 AM by Pete Castillejos-Hawaii Refinance or Purchase (808 Home Mortgage, Inc.)


Pete - I hear similar responses from LO's that have been around awhile.  My favorite from mortgage brokers is when they say they have better program than VA.  That is code for they can't do VA.

05/16/2007 03:58 AM by Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)


It sounds to me like she went to a Tom Hopkins seminar before she got her license.  She can use all kinds of flowery words and people should just melt in her presence.

I hate people who act like they know it all; they are very annoying to those of us who do;)

05/16/2007 07:43 AM by Steven Shewell, The Mortgage Maverick (Primary Residential Mortgage, Inc.)


Steven - I am safe.  I know what I don't know and am not afraid to tell clients I will research that for them.

05/16/2007 11:12 AM by Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)


Randy-There are still too many of these loan officers running around in Hawaii.  I always get involved in my clients choice of lender unless they specifically ask me not to.  Most of my first time buyers have no idea what they are looking at when they recieve a GFE so I sit down and explain it to them.

05/16/2007 11:57 AM by 1SG (Ret) David J. Kucic Hawaii Relocation/VA Expert (Tropic Lightning Real Estate)


Only lenders that at located locally can do VA locally. Thats the requirement for the program, just like FHA. I can't do a VA loan in California as a lender in California can't do one in Hawaii, even though our company is licensed in all 50 states.

05/16/2007 07:59 PM by Joe Schmitz (Platinum Mortgage Partners)


David - I just got the dreaded call from the other side of one of my escrows.  After the appraisal came in over asking and the other contingencies removed, they now are not credit worthy.

Joe - Local brokers do not do VA either.  Instead of saying that, they tell buyers that VA is a bad deal or they have something better.  Unfortunately it is better for the loan officer and not the buyer.

05/17/2007 02:45 AM by Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)


At least that person won't last long.  At least with me I was honest with you and actually asked if I could go to you for advice if I had questions on VA.  We got VA approved, but I haven't had much opportunities with them.  I know VA can be very helpful in getting a mortgage for a veteran.  Especially when their financial or credit profile is out of the box.  Hopefully I'll get a request, you would be the realtor that I would refer them to.

05/19/2007 07:44 AM by 808 Home Mortgage, Inc.


Sean - Thank you.  VA loans and housing allowance are among the the best benefits our military get.  It is a real shame when loan officers try to sticking them with loans that cost much more and require large sums of cash up front.

05/19/2007 09:51 AM by Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)


Yeah it's a bad way to do business.  I find that some LO's just look for the easiest programs to go with, benefiting themselves.  Every borrower has a unique situation and financial profile.  The borrower's best interest should always be top of mind. 

05/19/2007 05:37 PM by 808 Home Mortgage, Inc.


Sean - To have a long and successful career, your clients interest has to always come first.

05/20/2007 02:10 AM by Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)


Way to go Randy......i don't think the "new lender" will get too much business.  as a Vetran myself, why would I want one of her CW loans when I can get a better deal through VA?

07/06/2007 12:09 AM by Kathy McGraw ~ Calif Broker (CELLing Realty)


Kathy - I hear so many brokers telling vets that VA is not a good deal.  That is because they don't do VA.

07/06/2007 04:25 AM by Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)


She just couldn't help trying to chew that leather off her shoe huh.  Good post though.  Warning signs when I'm interviewing lenders.

Lexa 

07/11/2007 12:38 AM by Lexa Montierth (Currently Looking)


It's not uncommon for new LO's to pretend to know what their doing. As a matter of fact it is usually expected from new LO's. I'm sure that this girl was told by the NetBranch that she was inducted by that they have the best pricing, fastest closings, and best programs. I bet that she even believes it! Still, I learned the ropes the hard way and I have nothing but love for this girl. I am local which is obviously a huge advantage, but after a few years in this business this girl may be a top producing LO (or not).

01/28/2008 05:02 PM by Christopher Ohlsen (Lake City Mortgage)


Christopher - I saw her recently, she has moved on to multi-level marketing of some item or another.  I am not sure if she still has her mortgage license.

01/28/2008 05:10 PM by Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)


Well, when it finally gets to the point that "part timers" are not allowed as loan officers or real estate agents for that matter, this industry will be much better off.

01/29/2008 08:31 AM by Don Draughn - Mortgage Professional (High Point NC Mortgages)


Don - We will never get to that point, but there can be much higher educational requirements and higher standards of conduct.

01/29/2008 11:09 AM by Randy L. Prothero - Hawaii REALTOR® (Century 21 Liberty Homes)


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Real Estate Agent: Randy L. Prothero  - Hawaii REALTOR® (Century 21 Liberty Homes)
Randy L. Prothero - Hawaii REALTOR®
Mililani, HI
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