Who is your loan officer?
In the digital world, mortgage shopping is a little different than it used to be. What hasn't changed over the years, though, is that a mortgage loan is a big decision. It's often the biggest chunk of debt someone will ever have, tied to their most valuable asset (which, if things go wrong on the mortgage, someone could lose!). As much as fintech companies like to push the narrative of "push button, get mortgage", that's a recipe for disaster, or at least a whole lot of extra money spent.
Case in point, just this week I talked with a customer who was telling me about her loan process thus far. She was being 'sold' on a product (an FHA loan) that was vastly more expensive than some other options I thought may be available. Upon asking the right questions, it turned out another option was both a better, cheaper loan option, but also one that would help her present a stronger offer (a conventional loan) in a very competitive marketplace. In this particular case, I wondered if the loan officer was being self-serving (the numbers were really tight on a conventional loan, and approval would have been much easier on an FHA loan), or inexperienced? It had to be one.
In a separate instance, a guest on our very own Margaret Rome Baltimore 410-530-2400 's radio show inquired about knowing who their loan officer was. Specifically, a prior victim of identity theft, the gentleman wanted to know what protections were in place should an unethical person be entrusted with his personal data. This is a question that doesn't get considered often enough. There are honestly not a lot of stop gap measures to prevent an unethical individual from doing bad things with people's data. Sure, there is an ethics portion of an LO licensing exam, and a background check that prevents most people convicted of fraud from obtaining a license to originate, but is that really assurance that you can trust who you're working with?
In my opinion, one major gauge of who you can trust, is who has experience, a book of positive reviews, and something to lose. Odds are, a loan officer with years of industry experience and a long history at their employer are doing things the right way, and consider your loan as part of their career - they care about your experience, and care about the feedback you'll provide after your transaction is complete.
While it's not a guarantee that you'll have a bad experience with an inexperienced loan officer or an internet company, the odds of working with someone new to the industry, very young, and very inexperienced are high. Frankly, any research you do won't reveal much about them. I checked an online directory where most times you can find the "lowest rate" online lenders, and did a quick reference check on job history of the first loan officer's I could find. Here's what I came up with:
The first 3 I found were inexperienced, recent students, with little to no industry experience. I know nothing about the ethics of these folks, but I will say they are very likely unqualified to help someone with the biggest financial transaction they'll ever make, yet that's exactly what they're tasked with doing at these online companies. There is, after all, a price to pay to get the 'cheapest' deal.
Again, I emphasize that an experience with these folks may very well be great. Maybe they're hard working, doing their best to learn quickly, and they have a high degree of ethics. But can you be sure? Do they have any track record?
Experience matters in the finance world, as does reputation. Working with an experienced, trusted loan officer is not only a way to be comfortable about getting the right product, but to also to rest assured your information is in good hands with someone whose career depends on it!