I would do anything for loans, but I won't do that
Answer the phone at all hours of the day? Work weekends? Over-communicate, even when the communication is not fun? Yep. Check. Check. And check. Invest in my business to provide what I feel is the best possible loan experience? Done.
When it comes to getting loans, I do a lot. Over the past 15 years I've worked my tail off to create a steady stream of business that I can consistently rely on. Much of that comes from relationships with some wonderful people that share my name (if you're one of them reading this - thank you!). A lot of it comes from having helped many people, so that they share my name with friends & family, too.
When it comes to doing loans, we do a lot to get them! But like the musical artist Meatloaf, there are a few things I won't do (what exactly was it that Meatloaf wouldn't do?). One of those things is "pay to play".
What is "pay to play"? Simply put, it's paying for referrals. There are a lot of different names for it - MSAs (marketing service agreement), "in house" lenders for builders and real estate offices, and just plain ole' RESPA violating kickbacks. They're prevalent in the real estate industry, and some operate in a gray area of the rules while others are simply non-compliant, but many lenders and loan officers get many loans by paying to play.
The very real downside of pay to play is it sells out the customer - YOU. The home buyer. If I have to pay to play, I have to cover the costs of "playing". Who do you think those costs are being passed along to? When a builder offers a credit, but only if they use their "preferred" lender, the customer is paying for that credit through the inflated purchase price of the property. Or inflated lending costs (potentially fees, rate, or both). Or inflated title costs from the "in house" title company. One way or another, the customer pays.
In mortgage, there's also rarely a situation where a fiduciary relationship between lender and client is in play. For this reason, many "in house" lenders view their customers as the real estate agent whose office they're in, or the builder they're working for, and not the real customer - the home buyer.
Some folks have different opinions on MSAs and paying to play, but I've never liked it, and have never participated in it despite several offers that would have pumped up my loan volume. To be clear, there are some very moral, above-board reasons someone may be a "preferred" lender. For a builder, perhaps it's a lender that is willing to spend their weekends at the builder's community. For a Realtor, it could be a lender that has solid cobranded marketing and is willing to assist in their business when it comes to open houses, seminars, or something similar. But the moment money, quid pro quo, or financial incentives that are tied to going with one option (wasn't it Shakespeare who said "steering by any other name would smell as sweet...") are involved that things can get pretty shady, pretty fast.
I'd rather build a business on being the best. Having the best loan process, the best product selection, the best service, and the best understanding of how I as a lender can help a customer AND a referral partner. When it comes to paying to play? I would do anything for loans, but I won't do that.
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