Another great post. Crap, now I’m going to have to go real ALL of yours!

I sent this to my favorite Mortgage Broker to get his reaction.

Rob

Latest headache… Negotiated a deal based on one loan program/pre-approval letter…. get an accepted offer then the loan officer “does the client a favor” and encourages the buyer to go for a loan that requires a seller’s concession. Nothing like trying to re-negotiate a deal and try to work in a seller concession and coach everyone through the process. The story is worse and more involved, but that’s the short version.

Good reading. Clarifying up front how often to communicate goes a long way toward a smooth transaction. Another thing is what medium to use. Is it the phone or email or text? Email has become quite popular lately, not only between mortgage lenders and agents, but also with customers.

A few things I’d comment on:
1. Loan officers should learn to set up communication standards with their Realtor partners. Some of the items you hit on are perfect for a “get to know eachother” coffee. Thus, a loan officer can ask the Realtor, how often would you like to be updated, what form of communication do you prefer, how often would you like rates, etc….

2. You are absolutely in the legal limits of using the words “partner” and “symbiotic” – RESPA makes no statement in their regulations on this.

3. Realtors need the loan officers to keep them informed of new regulations. A lot has hit our industry, and the Realtors hear about it, but I’m not sure many of them know “what it means to them or their clients”. Thus the loan officers need to educate their partners on HVCC, New TILA laws that take place next week, etc.

thanks for the great stuff – you are fantastic!
Anna

For whatever reason, I’ve never developed that “special” relationship with a LO to the point where everything went smoothly and I was the “preferred Realtor”. A lot of my buyer clients come with their own lender and those that don’t shop ’til they drop. Even when I tell my “fave” LO that they’re shopping it doesn’t seem to make a difference. For many of the reasons Dave points out (the YSP, etc.), these LOs don’t compete well.

One last point, in today’s tighter credit market with stricter underwriting standards and appraisal issues it is more important than ever to find a LO that can execute and perform. It’s easy to say, “It’s not my fault. It’s the new appraisal system. It’s underwriting.” A good LO will know the system they’re working with and be able to say what they can do and do what they say.

As an agent…I wish my LO would…tell me if a marginal or borderline client can or can’t get done. Don’t string us along thinking you might “shoehorn” the borrower into something, maybe, if the underwriter is in a good mood that day. If it ain’t gonna work. Tell me. Oh. And give us a good GFE, up front.

I could go on…..

As for the wool – none there. I’m fairly familiar with the process, understand no single broker is approved with all lenders (the ones left standing) and fees vary.
As for shopping the loan among different mortgage brokerages, and having LOs compete based on rate, I’m going to defer to Ken Jansen’s comment “suggest the clients worry more about customer service than an extra dollar here or there.” Just like a good agent, a good LO will assess the individual’s needs and make sound recommendations based on them. It would be akin to an agent showing a buyer all 462 listings in an area to make sure “they’ve explored all options”.
In fact I surveyed this topic while I was at GE, and we found that consumers working with LO’s (as opposed to visiting a branch of B of A, etc.) did not request specific lenders or loan programs (number was over 95%). They may have asked about ‘features’ of programs (i.e. no fees) but at the end of it all, their concern was payment 1st then rate.

Great Post! I wish all the LO’s I worked with had the same opinion on how to work as your article outlines. Whenever possible I suggest the clients worry more about customer service than an extra dollar here or there. I have worked with some great LO and some LOsers too.

Thanks!

Ken

Understood (and I’m also primarily talking about Loan Officers at brokerages.)

#2 — I totally appreciate the spirit of what you’re recommending — it’s important to develop good working relationships with lenders that you trust — but in the world of Respa, “partnership” and “symbiotic” is very dangerous language for describing your relationship with a lender; it’s best avoided.

#3 — I can’t help feeling that someone is pulling the wool over your eyes on this issue. Regardless of the fact that any brokerage typically has access to multiple investors, you still need to shop the loan around to multiple brokerages. Do not trust a loan oficer who says they’ll shop it around for you. SERIOUSLY. No one broker has access to ALL investors and ALL products and YSP & fees can vary greatly from one broker to the next.

#4 I think we’re on the same page here but note that not all brokerages broker all products. Again; shop the loan around.