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Why Mortgage Brokers Can't Be Trusted

Mortgage and Lending with First Choice Mortgage

After a rough couple of weeks, I feel I needed to get this off my chest to someone. I have heard many brokers be tagged with the "used car salesman" title. With the mortgage mess, sure there were some throughout the country, but many are trying very hard to earn a living by doing things the right way. Well over the past two weeks I feel as though I am being thrown into the same catagory.

My first loan was a very good credit score, full doc, good work history loan. The down side being 100% financing. He doesn't qualify for many lender programs due to his income. However, I got a very clean and easy approve/eligible and placed with a large reputable lender. They called once for extra verification on employment and income which we promptly provided. Then after many calls and emails and a TEN DAY wait. They said they were turning down the file because they don't like the Villages area (very large and prominent retirement community in FL. They are basically their own city) because of the marketability if they had to sell! So now after informing my customer it should be no problem and I don't foresee any obstacles, I had to floor him with this! He was very understanding but that doesn't help the way I feel for this at all. I have had loans that I may have had questions but this was one I felt so good about.

Then, when I tried to put it behind me and move on to the next customer I get the knockout punch. I have another customer also good credit, NO derogatory items but it is a cashout refinance over 80% LTV. So, not the easiest loan, but for best pricing I go to the local credit union. He sends me a rate and terms after reviewing credit and application @ 8.625%. Pretty good considering a Bankruptcy in 1/04. I relay this info to the customer and they are happy. The loan officer at the credit union then sends me a good faith with a rate of 8.75% and dropped their cash back from $6k to $4k. He claims he didnt realize he didnt add on for the cash out and escrows. So, I call my customers back into the office and explain that this isnt me and go over the new terms which are still better than their current situation. They sign the GFE and leave. I send the full package over to the credit union and he ignores me for two days. Then Saturday morning he leaves me a message that he is emailing the package to me for review and he'll of course be unavailable until Tuesday. I get the package and now the rate is 9% and their getting back $3k. Now, I have to look my clients in the face and try to explain that I am not baiting and switching.

I am so steamed right now you can't imagine. Now what do you think these clients will think of me? How many referrals do you think I'll receive after this? Is a pre qual letter worth anything at all? Tomorrows another day and theres a good chance it will be better!

Erica Crowell
eRealty Inc. - Wake Forest, NC

Sorry you're having a rough time!  This is one benefit to my company, they fund off their warehouse line instead of brokering out.  I think in house operations is a major plus too.  It's saved some deals for me before.

Hope things improve for you down the road.

Feb 18, 2008 04:46 AM
Steven Keefe
Coldwell Banker Sky Ridge Realty - Lake Arrowhead, CA

I don't get your post... are you a loan guy?  The people it sounds like you are having trouble with are the wholesale companies not the mortgage brokers.  I have nearly 20 years in the Mortgage/Real Estate industry and resent the notion that Mortgage Brokers can't be trusted.

My mortgage Brokerage is the most respected lending institution in our market place and I can tell you that my loan officers can be trusted

Feb 18, 2008 04:47 AM
Robert Huntsinger
Empire Realty - Upland, CA
Empire Realty Upland, CA - Full Service at a Discount


Your right, it is hard to keep a good name and up front business impression when you are getting jerked around on the back side.

Take care!


Feb 18, 2008 04:49 AM
Renae Bolton
Marketing 4 Realtors - Garfield Heights, OH
I'm your Professional Real Estate Marketing VA!

Tom - Although I'm not in the mortgage industry, I can feel your frustration through your post.  It is extremely difficult to keep the professional appearance when things keep getting changed over and over again.  A good sit-down with the clients and follow-up after the loan closes will really help with the negative after-effects.  Perhaps sending them a card or note with your apologies for how things went and your appreciation for their understanding and patience through it all.


Feb 18, 2008 04:56 AM
.... ...
.... - Mauldin, SC
Sorry to hear they keep making you look bad to your clients Tom.  Unfortunately, I think this will continue until the loan market stabilizes.
Feb 18, 2008 05:00 AM
Tom Engelhardt
First Choice Mortgage - Ocala, FL

Erica- Yes, I can imagine that would help to take out the middle man

Steven-I too am a broker. The post is simply stating why we get a bad name in others eyes. Sometimes its truly not our fault but in the clients eyes -you're the bad guy.

Robert- Thanks for the kind words!

Renae-Definitely a good idea. Thanks

Jim-I agree. I think we may see more of this unfortunately

Feb 18, 2008 05:13 AM
Steven Keefe
Coldwell Banker Sky Ridge Realty - Lake Arrowhead, CA


I understand.  Our success has been built on having a very strong relationship with a few wholesale lending partners. We minimize the type of issues you are describing by using the same sources.  We are approved with a dozen or so lenders but use 3 on a regular basis.  The more deals you do with the same guys the more predictable the results will be.

Good Luck

Steve Keefe

Feb 18, 2008 05:44 AM
Steven Keefe
Coldwell Banker Sky Ridge Realty - Lake Arrowhead, CA

Maybe a more appropriate title would be "Challenges upstream in the Mortgage Process."

Steve Keefe

Feb 18, 2008 05:45 AM
Mike Jones
SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) - Tucson, AZ
Mike Jones NMLS 223495


As a broker, I know up-front what the guidelines are for each of my wholesale lenders.  It sounds like you're relying on someone else for this information, and the person you're relying on isn't very knowledgable.  You'll avoid this problem in the future if you familiarize yourself with guidelines and pricing for each wholesale source you have.  In addition, I run my own DO and LP, and never quote my client without having once again reviewed the lender's guidelines.

I agree with Steve that your title ought to be edited.  I'm a completely trustworthy broker.   If I sold used cars, people would trust me in that arena as well.

Mike in Tucson

Feb 24, 2008 10:09 AM
Mike- Thanks for the input. I too know the guidelines upfront and run all of my own DO and LP. The reason one file was turned down was not in the guidelines! And as for quoting my client on the 2nd, I had no other options except a lender I have only used a few times. The point was to let people know why some of the honest guys are misjudged. Not everything can be controlled by reading guidelines unfortunately. 
Feb 25, 2008 08:49 AM
Steven Odierno
Mahwah, NJ
NJ Mortgage & Marketing Professional

Tom - That is a tough streak.  But like anything else, you will work your way out of it.  The two most important factors, in my opinion, are that you did everything right and that you have learned something.  (Even if the lesson has been an unpleasant one.)  Right now is a brutal time to be in our industry, and most people who get knocked down like you did with those two loans will simply give up.  Take solace in the fact that you are not alone, that you can put your head on the pillow at night knowing that you did the right thing, and, finally, that all of this will only make you a better mortgage professional.  Best regards!

Feb 25, 2008 09:03 AM
Tom Engelhardt
First Choice Mortgage - Ocala, FL
Steven-Thank you very much! I have since gotten an approval from a different lender with better rate and terms on the latter. We are awaiting clear to close!
Feb 26, 2008 01:14 AM
Lee Walsh
SecurityNational Mortgage - Lake Mary, FL
Executive Talent Scout for Mortgage Professionals


I get your frustration, since you are the person "in front" of the customer, they could blame you for the lack of professionalism on the 3rd parties you are working with.

I started as a mortgage broker in 87' it was worse then.

You did the right thing.. you took your client somewhere else.

I would have written a note to the supervisor at the CU. explaining how everyone lost because of the sloppy job their representative did.

They not only lost the loan, they lost the depositor, and more than likely lost you for more referral business.  

Keep you head up! 


Feb 28, 2008 06:11 AM
Tom Engelhardt
First Choice Mortgage - Ocala, FL
Lee-I appreciate the encouragement. I thought about responding, but I was afraid it would just fall on deaf ears.
Feb 28, 2008 08:22 AM