In the first four parts of this series, I provided some background info on what happens with most mortgages after the close of escrow as well as some of the different types of lenders available to consumers and the advantages and disadvantages of those types of lenders.
In Part 5 and Part 6, I provide the kinds of information that buyers needed to know about a Mortgage Loan Originators (MLO) before deciding to work with them and I even provided blogs post by fellow AR members as examples of some of the questions that you ask any MLO you are thinking about working with.
While these were all great questions to ask an MLO, I personally thought there were other questions that were equally important. I want to finish up my series with a few more questions that you want to ask an MLO before deciding to work with them starting with:
1. Will you be handling all the aspects of my loan transaction? - Finding out if your MLO will be handling your transaction or if it will be delegated to an unlicensed assistant can be important to many buyers. Many MLO's (especially those working for big, national, retail banks) are primarily focused on generating new business for the bank that they work for. Once one of these MLO's receives the borrower's application, the application then gets turned over to the MLO's assistant to handle the transaction.
If you're someone who wants your transaction handled by an experienced and licensed MLO (like the one you thought you were hiring) and don't want to deal with a possible unlicensed assistant, then you need to ask this question in the very beginning before even applying for a loan with an MLO.
2. What kinds of issues may come up in the loan process and how will you resolve them? - Ask an MLO to tell you about the issues that came up in their last few transactions (these days, every transaction has issues) and find out how they resolved the issues and made it to the closing table.
Learning how your MLO successfully clears issues without jeopardizing the transaction is a good sign of how they may handle your transaction and any snags that may come up. What you don't want is an MLO that either doesn't want any borrowers that have issues or doesn't know how to resolve problems.
Even if you think you are a perfect borrower (no such thing anymore), rest assured, there will be some snag that will come up in your transaction and you need an MLO that is ready, willing and able to resolve the problem quickly and get the transaction back on track and moving forward. This leads us to the next question.
3. What is your close/pull-thru rate? - Basically, what you're asking is what percentage of their escrows do they not close (close rate) and after locking the loan, what percentage of their escrows "fallout" (pull-thru rate). While it would be nice to say that we (MLO's) have never had any escrows fall-out, unfortunately, that simply isn't the case, especially these days. While this may be a sign of the MLO's lack of mortgage skills and abilities, more often than not, it may also just be a sign of the times. Whatever it is, you should ask the question and find out this info. One last note, beware of the MLO who either doesn't have this info or doesn't want to share it.
Your concern at this point is why these escrows fell-out and what did the MLO do to try and save the escrow and why they couldn't close the transaction. With a few questions, you just may find out that it was the MLO who did every thing possible and went above and beyond to resolve any issues.
These days, there are so many reasons why a transaction may fall-out and quite a few of the reasons may be beyond the control of the MLO and no fault or their own and most certainly not a reflection of their skills and/or abilities. For example, a borrower losing their job a week before closing, is this the MLO's fault? Certainly not but these days, it's a little more common than you may think.
I hope you have enjoyed this series, I know I have. In doing this series, I hope I have shed some light on the lending industry as well as provided some valuable information on how to choose the lender and MLO that is right for you and your particular mortgage needs.
Every single day, I talk to people looking for more information on affordable mortgage loan options for them and/or their families. While there are a lot of prospective buyers out there that don't have a lot of special needs when it comes to getting a mortgage loan, there are so many more prospective buyers that do have a list of special needs when it comes to getting a mortgage loan.
It's these types of buyers that need to be particularly selective about the lender and MLO that they choose to work with. There are going to be some lenders and MLO's that will not be the best choice for them but they may not realize that until it's too late.
So many of my clients come to me after having a bad experience with another lender and/or MLO and it's not necessarily that the lender and/or MLO were bad but rather it's just simply a case where that particular lender and/or MLO was not the right choice for that borrowers particular mortgage needs.
CHOOSING YOUR LENDER: How Do You Know Which Lender is Right for YOU! - Part 1
CHOOSING YOUR LENDER: How Do You Know Which Lender is Right for YOU! - Part 2
CHOOSING YOUR LENDER: How Do You Know Which Lender is Right for YOU! - Part 3
CHOOSING YOUR LENDER: How Do You Know Which Lender is Right for YOU! - Part 4
CHOOSING YOUR LENDER: How Do You Know Which Lender is Right for YOU! - Part 5
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