Honest Mortgage Answers

How do you find a good loan officer…..

Have you ever asked yourself why is the mortgage industry filled with fraud and “hustlers” only out to make a quick buck? Or why it is so hard to find someone that wants to actually help their customers as opposed to make as much money on a transaction as possible?

There are two main reasons. First are the liberal Mortgage licensing requirements. In a lot of states (including Michigan) there are no licensing requirements to become a loan officer. If you are 16 years old and can legally work in the United States, I can hire you as a loan officer for my branch. It is scary to think that you might be giving your personal information to someone with a long criminal history.

The second reason is the recent refinance boom. When rates fell to record lows in recent years, everyone was refinancing their homes. It was real easy for almost any loan officer to make a great living. Just about anyone who could work a calculator and possess average phone skills would make $40,000 a year. Now days, rates are still low compared to the 40 year average. However, most people redid their mortgage and the refinance boom is over. These same people who where trained only to quote rates on a traditional 30 year fixed mortgage over the phone are trying to survive in a slower market. Unfortunately, because majority of loan officers never learned how to structure a mortgage or qualify a customer are now struggling. This is resulting in a lot of “bait and switching” (they will tell you one rate and closing costs over the phone then surprise you at the closing table with different numbers). This is the only way they can make a living in this market. Also, because of their lack of experience, they will make mistakes and tell you that you qualify for a better program than what you really qualify for.

So how do you decide who to work with? Most importantly, don’t simply look at the interest rate you are getting quoted. Every loan officer’s interest rate shouldn’t be further than about .25 apart. Plus, rates change all the time. You can get a quote from one person and rates will change by the time you call for your next quote. So you might be under the impression that you are getting a better or worse deal. But the truth is the economy is always changing causing rates to consistently move. If anyone is offering you a dramatically better rate then anyone else then it is probably not an accurate number. Remember the saying “if it sounds to good to be true, then it probably is.” Also, avoid anyone that asks for an “application fee.” The truth is there is no such thing as an upfront application fee. There are a lot of lenders that go around asking for a fee up front. Once you pay for it you are financially committed to the loan. If you back out, you will lose your money. You will also find some companies will collect this fee with not ever having any intention of lending any money. Avoid working with anyone that asks you for an application fee up front.

I recommend when deciding which loan officers to work with, ask the following 5 questions:

1. What are mortgage rates tied to?
Correct Answer: Mortgage Backed Securities
Wrong Answers: 30 year treasury note, 10 year bond market, prime, etc.

2. When is the next important economic report or event?
It is important to know when events are coming up or when reports are going to be released and how they impact mortgage rates. This will help you decide when is the best time to lock your loan to insure the best rate. The majority of loan officers believe that rates raise or drop randomly and they are wrong. You should work with someone that knows what economic news is coming up and the impact it will have on your mortgage. Remember that bad news for the economy will generally result in lower mortgage rates and good economic news will raise rates.

3. How does the federal government changing interest rates affect mortgage rates?
They have no direct affect. However, the verbiage the federal government will use will have an impact on Mortgage Securities. It is more important to see how they word their statement then the actual rate change. If the federal government is predicting higher inflation, then rates have a tendency to go down. However, the Fed raising or lowering interest rates will have a direct impact on most credit cards and home equity loans.

4. Can you tell me live and in real time what the current rates are?
If you were going to invest in stocks, you would want to work with a stock broker that could tell you what the market is doing any time of the day. You should use the same line of thinking when it comes to mortgages. You want to work with a loan officer that can tell you what is going on in the economy and the impact of that information on your mortgage.

5. How long have you been in the business?
As I mentioned above, a lot of loan officers just got in the business within the last few years. Of course, not all rookie loan officers are “unethical.” But it is a safer bet to work with someone that has a longer track record. Not only do they have more experience at writing mortgages, but it is more likely that this person will take his career more seriously and be around down the road to answer future questions.

I have been a Loan Officer/Branch Manager since 1998. I have extremely high ethical standards not just for me, but for the network of business partners such as title companies, appraisers, real estate agents, financial advisors, lawyers, and C.P.A.’s. Not only will I provide you with top notch service, I can help refer you to several other partners that will help you accomplish your financial goals. While other mortgage companies have to send you spam mail, advertise bogus interest rates, or bombard the radio air waves with advertisements to grow their business, I have built my business almost entirely on referrals.

Thank you,

Jason Lash
Branch Manager
Family Home Lending
866-366-5724
http://www.VirtualLoanPro.com/
http://www.HomeCredible.com/
http://www.HonestMortgageAnswers.com/

Posted by Jason Lash at 12:49 PM