Passing the Buck / It's the LO's Fault / A Convenient Misunderstanding

Services for Real Estate Pros with The Real Estate Investment Institute 1retiredsage

So many people want to pass the buck,to blame anyone but themself for the mortgage crisis. The most maligned being the individual Loan Originator, LO. The LO's are an easy target because some of them are guilty with regard to their clients, but the same can be said about any and every identifiable group.

The LO's job is rarely understood.

Worst of all, LO's are vulnerable because in most states they are not even required the 90 to 180 clock hours of pass the exam class that the real estate agents call education! When the finger pointers want to it's easy to find Bubba, LO to represent all LO's.


 "All the mortgage loan officer has to do is "SAY NO"!... in all the years I've been selling real estate, I've never known a loan officer who couldn't say "NO"."

 Please consider following is from:The Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA) protect you against discrimination when you apply for a mortgage to purchase, refinance, or make home improvements.

"Mortgage Discrimination

Your Rights Under ECOA

The ECOA prohibits discrimination in any aspect of a credit transaction based on:

race or color;


national origin;


marital status;

age (provided the applicant has the capacity to contract);

the applicant's receipt of income derived from any public assistance program; and

the applicant's exercise, in good faith, of any right under the Consumer Credit Protection Act, the umbrella statute that includes ECOA." 

With the possible exception of non-Hispanic white men no one can be turned down for loans they are qualified for! Even this group is protected! They could be married to a woman, a protected group. They could be gay, a protected group. An their economic power alone assures them equality. So as a practical matter LO's can't say no to anyone.

LO's don't have the right to say "NO!"

If an applicant qualifies for a program the LO's company offers the applicant can not be turned down!

When an LO turns down an applicant he has to provide a form called "Statement of Credit Denial" no where is there a check box for "Stupid idea!"

If an applicant ask what do you recommend the LO can show only those programs he recommends. If an applicant ask "what do I qualify for" or worse "I want" the LO has no choice!

There is enough quilt to go around, but lets not add to the problem with baseless finger pointing!


William J Archambault Jr

The Real Estate Investment Institute 

Posted by


William J Archambault Jr

The Real Estate Investment Institute      Cell 832-259-7078,      Houston 832-582-8415,       Las vegas 702-516-1569  Back Cover One House At A Time http:www//reii.org   

From my past: GRI 1975, FLI 1974, Catalyst from a client 1974 an agent that makes things happen, REII, The Real Estate Investment Institute 1995.

©William J Archambault Jr   ©The Real Estate Investment Institute   ©REII

Comments (16)

Terry Day
Mountain View Mortgage - Las Vegas, NV

Great post William. Thank you.

Jul 14, 2008 03:44 AM
Carey Pott
January Financial - Foothill Ranch, CA

Excellent point Bill. While we LOs have a responsibility to give good advice and honest numbers to our clients, at the end of the day if they want to do something dumb and qualify for the loan, we can either choose to strongly advise them not to and still give them the loan, or not do the loan and let someone else do it for them.

Jul 14, 2008 03:58 AM
Thomas Hargreaves
TriStar Financial Services - Eugene, OR

Thank you Thank you Thank you for that blog Bill.  I get soooo annoyed at Real Estate agents who think I am the reason that the loan is taking longer than they think it should, or that I am sleeping with the underwriter and can get the loan to close quicker.  We get paid the same way the Real Estate Agent does,  "after the closing"   So it is just as important to us to get the loan done efficiently and quickly.. and yes do not kill the messenger, as we are going by guidelines required by respa, just like a Real Estate Agent..   good blog

Jul 14, 2008 04:31 AM
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX


You're very welcome!


Jul 14, 2008 06:41 AM
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX


I always told my people: "give them your best advice, show them their choices, then do any damn fool leagal thing they want!"  We leagaly don't have any choice!


Jul 14, 2008 06:45 AM
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX


You're welcome.

You're welcome.

You're welcome.


Jul 14, 2008 06:46 AM
R. B. "Bob" Mitchell - Loan Officer Raleigh/Durham
Bank of England (NMLS#418481) - Raleigh, NC
Bob Mitchell (NMLS#1046286)

My major malfunction with the press and the politician's response to the mortgage crises is that they ARE playing the blame game and pointing their fingers towards that evil mortgage broker and the loan officers. 

We had reps from various companies coming into our office "showing" us how to fill out the 1003's for these stated income programs and also showing us how to work the income figure out backwards so that we knew which number to plug into the application so that it worked.

Now, these same lenders are blaming the loan officers for doing exactly what they told us to do with these programs!  It's just not right!

Bob Mitchell

ValueList Real Estate Services, Inc.

Jul 14, 2008 07:23 AM
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX


Ethics, are personal. It's not knowing how to do something, it's not education, that is the prolbem. It's what we do with the knolge, that matters!


Jul 14, 2008 07:38 AM
Todd Clark - Retired
eXp Realty LLC - Tigard, OR
Principle Broker Oregon

Very well said! I like the how you spelled it out why you couldn’t say no and didn’t get mad or angry, but proved your point with the facts! I agree that loan officers loaned what they could to anyone and everyone because the guidelines said they could and they couldn’t say no, like you said. But, I think a lot of the problem lies with what they do after a loan started to go into default and how they dealt with people. A lot of the time people wanted to work with them and the banks treated them like scum, not really listening to options that could be a win-win for everyone involved.

Todd Clark - Broker (GRI) Beaverton, Oregon www.IFoundYourNewHome.come (503)524-9494

Jul 14, 2008 05:11 PM
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX


Most LO's have no experience with loan adjusting (collecting) and even less in mitigation. Thankfully most loans are still originated by brokers and/or their corespondent lending division. This saves the consumer money, and they are more likely to get a good loan, but it leaves them alone when they need help from the loan service.

Over worked loan adjusters/mitigaters can respond to lies badly! For the best help, call often and early, tell the truth! You do not have a right to default. You do not have a right to a short sale. If you don't make your payments, you will trash your credit. If you don't make your payments, you will lose your house.

Help from the lender is possible if it is in the best interest of the bank.



Jul 14, 2008 06:39 PM
Gene Allen
Fathom Realty - Cary, NC
Realty Consultant for Cary Real Estate
There are many people at fault and over aggressive loan officers are a problem as well as agents.
Jul 15, 2008 02:02 AM
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX


"over aggressive loan officers are a problem"


Under aggressive loan origanators now ask "Would you like fries today?"


Jul 15, 2008 02:23 AM
Jennifer Monroe
Indigo Home Team powered by Compass - Charlotte, NC
Real Estate REALTOR®/Broker/Designer

EXCELLENT POINT Uncle Bill!  Why hasn't anyone else made this point? I hadn't even considered this, but it's absolutely true. You are indeed a Sage!!


Jul 15, 2008 04:39 PM
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX


Thank you!

It is true, at least according to two of my web sites.


Jul 15, 2008 05:35 PM
Lenn Harley
Lenn Harley,, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Bill.  This is good. 

And all the time I thought the LO took loan applications and got them approved because of the overbearing real estate agents. 

Jul 24, 2008 08:50 AM
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX


I had a good starting point!

REALTORS face the same problem, if a client demands to see a house or make an offer you legally can't refuse. It may not happen as often to you as the lender, but it's the same problem.

Overbearing is overbearing! It's also not always a bad thing, after all you and I are good people. I want my agents overbearing, who wants to be represented by a wimp?


Jul 24, 2008 09:07 AM