Ignorance or confused?

By
Mortgage and Lending with OneVoice Communications
I n the past couple of weeks I have been experiencing some interesting customers. I recently lost a deal to rate whoring. But what was confusing was my competitors lower rate came with $1500 more in closing costs, yet the lower rate was only $25.00 less per month. I pointed this out to the customer, explaining that it would take 60 months to break even, which is a complete waste. I then countered with the same rate and still lower closing costs, but they still went with the other lender because they made the lower rate first. Besides the fact that i was taking a .750 short(I did not tell them that), I informed them about how higher closing costs mean wasted money on trumped up fees. I also spent an hour face to face with them showing them there options and recommending the best option for their needs. As usual with high credit score clients their is no loyalty or respect for a lenders time .  I know I sound a little bitter, but when you spend time with a client to help them save money and make a small commission for myself,.50 bps(straight commission) on a $255,000 loan, then they call another lender who just asks what rate they were quoted and then takes a short just to get their business, because all the work was already done for them is annoying to say the least.  I think I will start targeting only poor credit clients, they seem to be more appreciative of my time and since I can't charge origination points,only discount points with no number fudging I believe the extra effort to get their loans approved will payoff with alot less rate shopping,maybe.  Perhaps someone in the Activerain community can share some tips on countering rate whoring.

Comments (3)

Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

Hey David,

    The pros & cons of the mortgage business.  Personally, I like to do a 50/50 split of conforming and subprime business.  Establishing a relationship/trust fact is important, yet it doesn't always ensure loyalty no matter how fair your deal is.  Everyone gets shopped, the real key is volume.  Maybe take a look at my blog http://activerain.com/blogsview/20623/Another-Reason-To-Do which addresses conforming business and why to do it.  Keep the faith David, don't let a customer or two who lacks appreciation deter you.  Onto the next loan my friend.

Nov 30, 2006 03:50 AM
Ken Smith
Suburban House Hunters - Arlington Heights, IL
David any reason for the bold print? Much hard to read then normal font.
Nov 30, 2006 04:10 AM
DAVID SCHALL
OneVoice Communications - Herndon, VA
I need to  be careful what I wish for. Now I am receiving requests for preapprovals with 500 middle credit scores and $50 in assets. My life cant find the middle ground. Oh well, as life mocks me in the business world, my personal life is doing really well with my upcoming marriage. I realize that balance in ones life is very important even if its in the extreme.lol.
Dec 04, 2006 02:50 AM