Mortgage Magic started as a wholesale lender. The first loan we funded was $150,000 in 1991 and immediately we got a message that the loan was a fraud loan and we needed to buy the loan back. That was a shock and besides that I did not have $150,000. I called the mortgage broker who represented the borrower and he was in shock as well. He did not know that the borrower had 'doctored' information. I instructed the mortgage broker to re-package the loan correctly and submit it honestly to see if he could get the loan approved to pay us off. We were all lucky and we got the money to pay the loan off in 30 days whcih meant we did not have to dig into our pockets. We did wholesale lending for three more years without any further mishaps before we choose to only broker loans. It was a lesson learned quickly and well.
But there were unexpected bumps when things were going fantastic. We were a large broker and a title company in San Jose really wanted some of our business and the sales rep was amazing in his persistence. He came into our office every business day for more than two months before we ever gave him an escrow. (It was common in those days that bankers, Title Companies, and all kinds of industry companies made office visits).
After a while we were doing a lot of business with this Title company and had just over 60 escrows going at one time. Then one day the Title company refused to fund a loan but could not give us a reason why. We were refinancing a first mortgage and had approval from Bank of America to keep their equity line in place behind our new first mortgage loan. I called the Title rep and he did not know why the loan would not be funded. Then I called the manager and he could not tell me any reason. The Title company attorney called me and he was vague answering my questions. They were concerned that Bank of America had not really given approval and I told him that we still had the certified envelope the agreement came in.
The attorney was frustrated and blurted out "We will not fund a fraud loan". OMG if he were not 50 miles away I would have choked him. I immediately called the Title manager and cancelled all 60 plus escrows. Mortgage Magic was built on complete honesty !
But there were unexpected bumps when things were going fantastic. We were a large broker and a title company in San Jose really wanted some of our business and the sales rep was amazing in his persistence. He came into our office every business day for more than two months before we ever gave him an escrow. (It was common in those days that bankers, Title Companies, and all kinds of industry companies made office visits).
After a while we were doing a lot of business with this Title company and had just over 60 escrows going at one time. Then one day the Title company refused to fund a loan but could not give us a reason why. We were refinancing a first mortgage and had approval from Bank of America to keep their equity line in place behind our new first mortgage loan. I called the Title rep and he did not know why the loan would not be funded. Then I called the manager and he could not tell me any reason. The Title company attorney called me and he was vague answering my questions. They were concerned that Bank of America had not really given approval and I told him that we still had the certified envelope the agreement came in.
The attorney was frustrated and blurted out "We will not fund a fraud loan". OMG if he were not 50 miles away I would have choked him. I immediately called the Title manager and cancelled all 60 plus escrows. Mortgage Magic was built on complete honesty !
Comments(3)