I've been in the mortgage/real estate business since 1983, with most of the past 15 years working with repeat and referral clients. Our relationships have a great deal of trust, which I believe to be important - especially in the current real estate/ mortgage environment. But, when is it time to tell a borrower to apply with another lender?
I wandered in to the world of Internet marketing, and realized that this same loyalty and trust bond does not exist, so made the decision to only agree to work with clients I am able to meet with in person when they are not an existing client or a referral from one. I focus on providing quality service over quantity, and am not interested in the "throw it up and see what sticks" business model nor am I interested in "playing the numbers game". I realize there is a certain percentage of fallout in this business, but my percentage has always been very small.
Last week, I received a referral of a new client. This client has been actively shopping many different sources, from the Internet to their existing lender to other lender types they feel comfortable dealing with in this day when so many banks are performing poorly. We've already spent close to 4 hours on the phone discussing market triggers and sources of information/ data they may watch to satisfy their thirst to find the ultimate interest rate, and I believe we have established the beginning level of trust I feel necessary to decide to work together. So, I take the application over the phone, and these shoppers are convinced the interest rates will improve the following day when they are prepared to make the appointment to bring me the necessary paperwork, review and sign their application package and lock in their interest rate. But, the next day the market performs poorly, and interest rates move up.
The borrowers make their round of phone calls and discover their prediction did not happen. Although they know there is enough benefit to go ahead and proceed with their refinance, that they can meet their objectives to consolidate and cash out while paying less than they do presently, they want to KNOW they are getting the lowest possible rate. They want to be SURE they have timed the market and caught it at its lowest possible point. We've had the conversation about the only way to know for sure what will happen is through hindsight, but they STILL want to KNOW. We've had the conversation that only God knows. If I knew it would be highly unlikely I'd still be a mortgage consultant, as I would very likely be day-trading from various exotic locations around this earth.
In to our story comes the loan officer from a different organization, who quotes the borrowers the rate they want. They DO tell them they cannot lock the rate in until they have a complete package including the appraisal, so I ask the clients "what does this rate quote mean if it cannot be locked?", and we talk about how they will have paid their appraisal and credit report fees to find out what terms they can really get. So after establishing a rapport and comfort level (I think), the clients call the day after they complete their application with me, after they've made their round of calls to learn the interest rates moved upward again, and one of the loan officers tells them they can still get the same rate they quoted the day before, which was lower than every other lender they received a quote from, with the same fees - AFTER all the other lenders opened higher and had multiple mid-day increases!!!!
While I'm in between appointments, on hold while returning messages that came in during my appointment, I shoot an e-mail off to these folks suggesting they go ahead and apply with that loan officer who is quoting them the rate they want. I'll hold on to their information in the event something goes awry with that transaction, and the worst case is they will have lost their credit and appraisal fees paid for that lender's transaction. I cannot afford to invest 4 more hours reiterating the same issues without a committed borrower. The time has come for them to go ahead and find out for themselves, and I can rest easy knowing I've done all I can do.
Do you believe it was time for me to recommend they go ahead and apply with the other lender?
See out there!
Karen Cooper - OR/CA Mortgage Consultant - www.Quality4Loans.com