Aren't All Lenders The Same?

Good information, however with the updated regulations, as already noted, the GFE is no longer readily available without basically a full application. Paul and Mike make good points in their comments - and Joe's comment, unfortunately has to be locally delineated, as every company that may offer an upfront estimate is probably calling it something different.

For further information on licensing of Loan Originators, Loan Officers and their companies - you can refer clients to:  http://mortgage.nationwidelicensingsystem.org/consumer/resources/Pages/default.aspx

Furthermore:

All state licensed and registered mortgage companies, branches and mortgage loan originators for the following states can be found on NMLS Consumer Access (unless otherwise noted):

Alaska              Arkansas                  Arizona             Connecticut              California                      District of Columbia                           Georgia*           Iowa                       Idaho                            Indiana             Kentucky                  Louisiana          Massachusetts          Mississippi               Montana            North Carolina           North Dakota     Nebraska*               New Hampshire               New York*          Oklahoma               Oregon*            Pennsylvania            Puerto Rico*               Rhode Island      South Dakota          Tennessee         Texas                      Vermont*             Washington         Wyoming*

*Mortgage Loan Originators will be added in 2010.

For the following states, NMLS Consumer Access only contains state licensed mortgage loan originators:              Delaware        Michigan

Also, at least in Washington, we have seen most of the Mortgage Brokers close up shop due to new regulations that require them to pay for some of the fees - but at same time requires all funds that used to be used to make their profit now be used only for the client's benefit.

If you are in one of the above listed states -- you will want to concentrate on Licensed Loan Officers, who have been through national/state testing, as well as background checks.

Stephanie: Thanks for this. You've done a great job summing up a very confusing process for the customer. Good job! And congratulations on your featured post!

Stephanie - I always encourage my clients to consider past client testimonials in addition to the information you mentioned above.  Anyone can offer a great rate today, but I think the most important factor is.... can the people involved in the transaction (loan officer, processors, underwriters) be successful in getting the client from application to the closing table in the quickest time frame with the least amount of bumps in the road. 

I've found when there are no hiccups in the mortgage process the buyer is more at ease.  This is exactly why I provide my clients a list of three stellar loan officers in my local area and encourage them to meet with all three and possibly another they've had the time to research to ensure they'll be able to deliver in every aspect of the transaction.

Stephanie,

I derive 90% of my business thanks to referrals from Realtors and have done so for my entire 20+ year career as a mortgage professional.  Your advice is superb, to say the least!

Steven Cook pointed out the NMLS licensing site.  Realtors need to know this important fact about Loan Originators in today's market.  To obtain my MLO License, I had to undergo a criminal background check, fingerprint check through the FBI database, credit report, ten year employment and residence history, a Pre-Licensing education class and a National and State-specific examination. 

LO's who work for Banks are exempt from the NMLS Licensing requirements; they need only be registered with the system. 

Mortgage Banker, Mortgage Broker, Bank or Credit Union Does it really matter?    Not really, In my opinion the knowledge and experience of the Loan officer is the most important ingredient to the success of a purchase.   If they are knowledgeable and experienced you should have little concern where they work, because they know the name on the door can make or break them.  I may be bias in that I am a Mortgage Banker, but I believe Qualified and experienced Mortgage Bankers and Brokers are the best choice for most consumers.  Because Mortgages are the only thing they do, they do it better.  

My concern is when Agents/Realtors do not educate them self and are closed to working with different lenders.  In Northern ohio many Brokerages have Affiliated Business Arrangement with Lenders and Title Companies.   Because Agents/Realtors are strongly encouraged to use the AfBA, I believe a dis service is done to the consumers.  That is a subject for another day. 

Possibly this post is partially inspired by a Borrower that called me today for a loan to Price Check the Realtor Preferred Lender.  The Realtors Preferred lender was quoting the borrower a loan with Similar Closing costs however the rate of interest offered was a Half Percent Higher than I offered the borrower.  

Stephanie,

Nice post. I've originated as a broker and with an FDIC insured bank.   

Not all banks service the loans they originate. In fact, many sell them the same way the non-depository bankers do.  The profit is made in "churning" the money rather than collecting interest on a 5% note. The only reason rates are still low is because the Feds are still buying most of the mortgages. Rates will have to go back up to get the private sector to purchase mortgage debt.

Brokers, bankers, and smaller banks often originate through different lenders. Many bankers and banks have their own underwriting and processing staffs giving them a speed advantage since the brokers have to package the loan and send it to the lender for approval.

You can no longer get a Good Faith Estimate until the buyer makes a complete application with the lender.

Tom

Stephanie,  Of course you know I am not surprised to see you write such a well constructed and thought out post on choosing a lender.  Agents with your understanding of finance are a dream come true for any mortgage professional....you know we would stalk you for your business, don't you?  LOL!

What great advice for consumers.  They really do think the ONLY thing they should be concerned about is rate.  That's the least of their worries,, in my opinion.

Stephanie:

Of course we know that they are not all the same, but many clients and potential clients seem to think they are.

good points

good reminders

thanks

Stephanie- this is one of the most consumer-centric posts I have seen in a long time. I used to originate before I started my firm, and can't find anything I'd take issue with. 

Stephanie, these are great points for the consumer to consider when getting a loan. There are many lenders out there and even some good ones!

Some of us "bankers" are "brokers" too, the flexibility affords your client more options but experience does count! Although with all due respect I have known a few seasoned LO's that haven't put in enough time or effort in the recent years to know the current lending standards and are struggling with new compliance time-lines, hard to let go of the past. Rate and fee matter but service if bad is a deal breaker. Also, personally, like many here, I will not issue a GFE until I have a full application :)

There are a handful of states still transitioning to be compliant under the SAFE act and come December 31, 2010 all loan officers (unless you work for a retail bank or credit union) are required to have registered with NMLS. You can check here for your LO http://www.nmlsconsumeraccess.org/ 

Thanks Stephanie for the post. I have enjoyed logging in to hear the perspective of many here. Helps me get to know what you all look for and understand the challenges on your side of the transaction.

Hi Stephanie - I am a broker, corespondent and a bank!  My mgmt team rocks : )  The biggest problem with shopping rates is that rates are a moving target.  Unless the quotes come from multiple lenders at the same exact time one doesn't know if they are really comparing apples to apples.  Fees can also change but once disclosed cannot increase.  This is a great blog post thanks!

excellent post!

All lenders are definitely not the same.  It's important to get the right one, and right is not defined by the lowest interest rate or fees.

Stephanie, this is great basic info about why we need to make sure we recommend solid lenders to our clients who are getting a loan.  For all the work that goes into a sale, we want it to get to closing.