Hawaii Randy's Real Estate Opinions: Why I do Not Recommend Out of State Lenders

Why I do Not Recommend Out of State Lenders

Let me start by saying that I know there are many good loan officers and lenders in other states who may be able to do a quality job on a mortgage.  Unfortunately I have not seen a single loan generated through an out of state loan officer go smoothly.

That is a terrible batting average.  The story gets worse.  In a previous blog post The Lending Industry Needs to Step Up to the Plate I stated that a major problem in the lending industry is there is no easy recourse for a buyer who is treated unfairly by a lender.  For out of state lenders it is even harder.

This Wednesday we had as our main speaker for our regional Realtors meeting a representative for Regulated Industries Complaint Office (RICO) from the department of Commerce and Consumer Affairs for the State of Hawaii.  She made a presentation on the most common complaints against real estate agents and how to avoid them.  That will be another interesting post.  But the important part was the Q&A session at the end of her presentation.

One of the top agents in our area asked the big question. What is the procedure for filing a complaint against an out of state loan officer who violates the law or creates harm to one of our clients?  Her response was that they have no authority and do not regulate out of state loan officers or lenders.  They can only regulate loan officers who have a Hawaii license.  Did you hear that?  A loan officer does business over the phone or the internet, makes a big mess and we have no recourse short of taking it to the Federal level. Now she did say we can file a complaint with them or the Better Business Bureau, so if anyone checks on them in the future they will be made aware there have been complaints, but that is the end of their authority.  In other words you can yell, but nobody can respond.

If in Hawaii and thinking of financing the purchase of your home, get references.  There are many terrific local loan officers and lenders who can do a great job for you.  There are also many others who may fall in another category.  They also fall under local licensing laws and you have some recourse through the State of Hawaii if they do you harm.

Ask your Realtor for the names a few loan officers they have had good experiences.

Good luck and happy house hunting.

 

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Randy L. Prothero, REALTOR®

Broker-in-Charge, ABR, AHWD, CRB, CRS, e-PRO, GRI, MRP, SFR

eXp Realty

Team Leader - "The Prothero Group"

Randy Prothero is well established as an expert in working with military / VA clients and first time home buyers.  His home seller's (listing) campaign is one of the most aggressive marketing programs in the area.  His luxury home listings sell faster and for more money.

Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) Performs mediations and ombudsman services for the Board of Realtors.  To improve overall professionalism in his area Randy also offers classes for real estate agents. 

www.HawaiiRandy.comOahu (Honolulu County) Property Search  Hawaii Military Relocations

Comment balloon 100 commentsRandy Prothero • June 23 2007 11:04PM

Comments

Randy:  Like I was telling you about a lead that I was going to take out tomorrow morning. I just got off the phone with him and he did the whole application process with a mainland lender. I told him this same thing and I also told him I am not into playing games with that particular lender who tells their clients that they will give them a rebate to use their preferred agents. (what it is is that they buy off the client for 1,500 for credit for closing costs which is paid by the agent) No deal here. He was saying he doesn't care about their agents. We'll see if I hear from him tonight.

I refuse to not have a recourse. No wonder they don't care about timelines with us being over here and them over there. No recourse.

Posted by Celeste "SALLY" Cheeseman, (RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE (Century 21 Liberty Homes) almost 11 years ago
Sad state of affairs!  The whole state by state regulation standard has more holes than a whiffle ball.  Accountability, in my mind, as always been key.  That said, you bring up a nice point Randy in trying to pinpoint those LO's who may be using National Licensing as an Institution for doing what they want, when they want. 
Posted by Jason Sardi, Your Agent for Life (Auto & Home & Life Insurance throughout North Carolina) almost 11 years ago
I totally agree with you. Most are major diasters but a few have been very good. I have had several Bank of America and one from USAA that have gone well. They do not know local taxes, local laws, local title companies, flood zones, insurance issues, condo laws, and may never do business here again so they may not care about the realtor interaction. I am spoilded by the local lenders with in house processing that care about timely calls.
Posted by Eric Bouler, Listening to your Needs ( Gardner Realtors, Licensed in La.) almost 11 years ago

Hi Randy  !

Sounds like something very interesting.
Posted by Nalliah Thayabharan, Home Inspector - Commercial Building Inspector Toronto (Expert Building Inspections Ltd) almost 11 years ago
Randy -  You are singing to the choir my friend!  I run into the same problems here in Alaska.  Out of state lenders, with very, very few exceptions, are nothing but headaches.  The underwriters are so unaware of local customs and practices that invariably any sweet deal turns into a nightmare.  For your clients directed to this discussion, please, please take Randy's advice on this.  He knows what he's talking about!
Posted by Debbie White (Southeast Alaska Real Estate) almost 11 years ago
We have the same problem here in FL, in fact, I don't even like to use out of county or national lenders for the same reasons you mentioned.
Posted by Dan Homan (Coldwell Banker Ellison Realty, Inc) almost 11 years ago
Thank you for your post, it is very informative, keep posting and I wish you good luck with your business.
Posted by Francisco Gonzalez, Your Real Estate Consultant For Life (Century 21 Real Estate Alliance) almost 11 years ago

I Whole hardily agree!  If I can't practice real estate out of my state without taking classes and etc. why can lenders?

 

Sorry Lenders if you don't agree!

 

Lexa 

Posted by Lexa R. Montierth, Real Estate Sales Agent and Marketer (NextHome Complete Realty) almost 11 years ago
I always cringe when a buyer selects an out-of-state or online lender. I know it's not going to go smoothly.
Posted by Elaine Reese, REALTOR® in central Ohio (Real Living HER, Powell Ohio) almost 11 years ago

Sally - Good luck, you know I have had issues with that same mainland lender.  They cost me a recent client with their predatory practices.

Jason - It is like the Wild West out there on the lending side.

Eric- I like local lenders who want to do future business.  They are always much more responsive.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Nalliah - Thank you

Debbie - You folks in Alaska are almost as removed as we are in Hawaii from those mainland lenders who do not feel they have to be accountable to us.

Dan - If you find a few great local agents, you life will always be some much more stress free and more importantly your clients.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
Randy -  Very much so.  Hawaii and Alaska have much in common.  In fact, you'd be surprised to know that Hawaii is a common vacation destination and second home market for Alaskans.  The big surprise is many of our independent tourists hail from your state.  There are fishing lodges in my area (at least three) who operate almost exclusively for their clientelle from Hawaii. 

Go figure!?
Posted by Debbie White (Southeast Alaska Real Estate) almost 11 years ago

Francisco - Thank you

Lexa - I am licensed to practice real estate statewide.  I would never try it.  I stick with where I am an expert.

Elaine - I find their chances of getting the home at a good value and without tons of stress and aggravation just flew out the window in almost every case.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
Debbie - I have met many tourists from Hawaii.  Several of my friends go up to Alaska on those fishing trips you described.  I would like to take one of those myself one day.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
Oh, yeah...with all the weight you lost Randy you would fly off the boat at a little weaving...haha.
Posted by Celeste "SALLY" Cheeseman, (RA) AHWD CRS ePRO OAHU HAWAII REAL ESTATE (Century 21 Liberty Homes) almost 11 years ago

Randy....  just a friendly hello.  ;o)   You know my thoughts. Just hope my 2 fingers don't start typing on their own. ;o)  Besides...  even if I was licensed in Hawaii or Alaska, I wouldn't do the deal. On the Eastern side of the US and Cali, all day long. Why?  Because not only do I know these states, have done business in these states, know the escrows (what needs to be charged), but have local people in each state to handle the appraisals and such.

Besides, I have seen lenders next door screw up a deal also. Trust me, I know the point that you are making. The main reason why these deals get screwed up is because they will never have to look the lender or the client in the eye. That is the main reason. As someone mentioned, being held accountable is not an issue with them.

I only bring this up because you can only tell a client so much. And there are some professionals that know what they are doing, no matter what state their client is in. And I just believe in educating the client in their decisions. Apparently I have made some enemies on here now because I stand behind this. Just my .02.

Overall, well said and some very valid points.

                                                                                                       jeff belonger

Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 11 years ago
Interesting information. Thanks for sharing it.
Posted by Bob & Carolin Benjamin, East Phoenix Arizona Homes (Benjamin Realty LLC) almost 11 years ago

Sally - I may have lost a lot of weight, but I think I am still safe from that happening.  :)

Jeff - In each state the laws and contracts are different.  Just one of many examples of issues that I have had come up is a conditional loan approval letter.  I have had mainland lenders tell me they don't do that.  They knowingly put the client in breach of contract on flat out didn't care.  I also have run into the same problem with two different local credit unions.

I have seen many bad loan officers locally also (and real estate agents).  That is reason I recommend getting references.

Bob and Carolin - You're welcome

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Randy.... that's why I said I wouldn't do loans in a few states. The states that I do loans in, I know the contract laws and time frames...  when taxes are due....  some states that I deal in have state stamp taxes that the buyer is responsible for....etc etc.  Trust me, I know what you are talking about.  Now, I need sleep.  ;o)

                                                                                                           jeff belonger

Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 11 years ago
my only problem with this is when buying out of state. i found it necessary to use an out of state lender as none of the lenders in my state will do the loans (too small)
Posted by John Evarts (Classic Property Management of Santa Clarita) almost 11 years ago

Jeff- I am the same way about doing business in other counties.  I am licensed, but am expert enough to do it right, so I won't.

John  - It is best to use a lender in the community where you are buying.  Your real estate agent where you are buying should be able to give you a list of good loan officers in the area.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Randy.... if you don't mind. John, it's not that they won't, but because they don't want to work for their money. The smaller the loan, the less money a lender will usually make compared to a larger loan. We all get the same programs and money from the same places. California's medium priced homes are about $425,000?  $450,000?  The loan officers in Cali. are used to making a certain dollar amount then and many won't settle for anything less. Just the facts of life and the facts of lending. Sad, but so true. Me?  It doesn't matter for the most part.  The more loans, the more chances for referrals.

                                                                                                             jeff belonger

Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 11 years ago

Randy, I disagree with you wholeheartedly.  It is  likely that HI has nuances that mainland LOs might not know about but there are many LOs who do a great job across many states.  I am one of those - I am in FL and the vast majority of the loans I originate(d) are not in FL.  A good number of the LOs in my mortgage company (not here at Re/Max) work VO like me and originate succesfully in multiple states.  

Maintaining good communication with the realtor(s) and settlement company goes a long way to ensuring success.

- Tchaka 

Posted by Tchaka Owen (Galleria International Realty) almost 11 years ago

Tchaka - Are you disagreeing with my statement that of all the many transactions I have been involved with or have had other agents I know involved with, not one done by an out of state lender went smoothly.  That is a compelling statement would you not agree?

The fact that our state regulators have no recourse against out of state lenders did not make an impression on you either?

I am not trying to be insulting, but if you go back and read my previous posts on this subject. If you also read my posts on the subject of agents who do both loans and sell real estate you will find a consistent pattern in the responses.  The only people who disagree with me are the agents who are engaged in the practice I described.  All others are agreeing whole heartedly.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Randy, I cannot speak for your personal experiences and have no reason to doubt you.  What I am disagreeing with is the notion that out-of-state LOs are unable to do a good job as I happen to know many who do (including myself).  That's where I took issue with your post.  Perhaps I came off too strongly, that was not my intent.

In regards to the need for state regulators to implement some sort of recourse, sure that's good.  I'm all for ensuring high quality work.  And what I was insinuating is that if you've never had an out of state lender do a good job then my guess is that HI has certain things that are unique to it.     

- Tchaka 

Posted by Tchaka Owen (Galleria International Realty) almost 11 years ago

Tchaka - The problem is we have state licensing that helps protect the consumers.  The out of state loan officers not only do not know our market, our laws and our business customs, they do not have a state license and do not fall subject to our local regulatory agencies.  That leaves the consumers vulnerable.

Remember the title of my post: Why I do Not Recommend Out of State Lenders.

I started by saying:  Let me start by saying that I know there are many good loan officers and lenders in other states who may be able to do a quality job on a mortgage.  Unfortunately I have not seen a single loan generated through an out of state loan officer go smoothly.

 

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

I have heard horror stories too....  

The best you can do is file a complaint with the licensing authority over that loan officer. I don't know about other states, but here in Texas you would contact the 'Texas Department of Savings and Loan'

Sadly, I have more difficulties working with out of town realtors than local ones..... never have been able to figure that one out!!! My best guess is that it has to do with preconceived notions.

Well, except one..... who actually refers her clients to an out of town realtor..... me.

Out of town/state lenders is here to stay. I would think that the realtor who embraces these changes will do far better than those who do not. I suggest that ALL realtors learn a little more about loans. Learn what kinds of questions to ask and what 'red flags' to look for. Learn to work 'with' the lender instead of 'steering' clients to your buddy

Posted by Tom Burris, Texas/Louisiana Mortgage Pro - 13 YRS Experience (NMLS# 335055) almost 11 years ago

Tom - How do they handle out of state lenders in Texas?  If they are not licensed in your state what authority does Texas Department of Savings and Loans have over them?

Why do you do referrals of out of state Realtors? Are you competing with the Realtors in your area for the referrals?

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Randy,

Can you think of 1 good National Direct Lender out there?  I can't... that questions brings to mind, Ameriquest, Ditech, and other various over the phone or internet mortgage companies.  Nothing but horror stories all around, and the reason is that they simple don't care.

If you are a local guy, your reputation is everything to you.  You want to make sure you treat your clients with respect and look out for their best being.  If there is anybody out there reading this post and thinking about using one of these national lenders, pick up the phone and call your local broker. 

I guarentee at the end of the deal you will be glad you made the call.

Posted by Jeremy Redlinger, NMLS #627335 (Guardian Financial) almost 11 years ago
Jeremy - I like working with people who know the market and have a vested interest in doing a good job.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

 

Randy, accountability is a big problem in the Lending Industry even with in state Lenders.  The advantage that I see in using an in state Lender is that if they mess things up, at least you can make others aware of it and warn them about using them.  If an out of state Lender blows a deal and you tell others about it, it does not have the same impact in my opinion the same impact on them.

The other difference is the knowledge that an in state Lender has about doing business in a state vs. an out of state Lender.  This is not to say that all out of state Lender do not have the necessary knowledge, but it becomes more of an issue especially with Loan Programs that are specific to that state.

The Lending Industry just like any other Industry is about finding good quality people that you feel comfortable working with.  Where is your comfort level, and what level of service are you looking for?

We can't paint an Industry with a broad brush, because there are always exceptions, but I do feel that general rules of thumb as you have stated in this Post do apply. 

On a side note I don't know if I am going to have time to comment on your Posts for the next couple of days because I am taking the wife on a mini vacation, but if I don't I will be looking forward to reading them when I get back.

  

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 11 years ago

George - Accountability is a huge problem in many industries.  The problem in lending is they are dealing with huge sums of money and the public needs better protection.

That is great that you are taking your wife on a mini vacation. My wife and I need to make time to do the same.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
Randy,  Great post.. I think you know how I feel from my previous postings.  It is hard enough to keep up with the laws in Florida.  Stay with who you know and trust.
Posted by Matthew J Blum - (retired from the business) almost 11 years ago

Randy, our state licensing board wouldn't have anything over the out of state lender..... I don't think. I believe the consumer would have to initiate the complaint.

I get referrals from an out of town realtor, not out of state. As I only lend in Texas.

I don't 'compete' for local realtor business. As a matter of fact, I don't solicit them at all. They seek me out if they need a partner. And I am picky with whom I will work with.

 

Posted by Tom Burris, Texas/Louisiana Mortgage Pro - 13 YRS Experience (NMLS# 335055) almost 11 years ago

Our agents have had many successful settlements with out of state lenders.  Where we've run into trouble is the high LTV loans from Internet based lenders where the buyer got "pre-approved" before contacting a real estate person.   But, we usually get through O.K. 

For me, I want to be able to "look someone in the eye".  I don't send buyers to lenders, I take them. 

Publishing the causes of complaints in HI will be interesting. I published the same thing for MD on May 1.  Take a look.  It will be interesting if the causes are similar. 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) almost 11 years ago
I have a wonderful Wells Fargo loan officer in Arizona.  He is one of the best I have ever worked with!  One of my buyers has used him before her move to North Carolina and chose to use him when she purchased here.  Even though he had never done an attorney closing it went without a hitch.  Great communication too!  His fees are very low so one of my other buyers has used him as well.  Perhaps I was lucky, but I think being out of state isn't the issue, it is the "bad apples" both in and out of state that are the problem.
Posted by Diane Aurit almost 11 years ago

I have a wonderful Wells Fargo loan officer in Arizona.  He is one of the best I have ever worked with!  One of my buyers has used him before her move to North Carolina and chose to use him when she purchased here.  Even though he had never done an attorney closing it went without a hitch.  Great communication too!  His fees are very low so one of my other buyers has used him as well.  Perhaps I was lucky, but I think being out of state isn't the issue, it is the "bad apples" both in and out of state that are the problem.

 

Posted by Diane Aurit, Lake Norman Real Estate (LKN Realty, LLC) almost 11 years ago

Randy, I apologize for jumping back in I am not highjacking your post.  I wanted to post a comment to Lenn,  When you are saying you have not had a problem with out of town lenders only when you have HIGH LTV's does it become a problem.. I would take that as large down payments or very easy deals to do anyone should be able to handle that.  I do agree 1000% with you about you not sending your people but bringing them.  That brings professionalism to the next level.

Posted by Matthew J Blum - (retired from the business) almost 11 years ago

Randy - It pains me when I have to turn down a loan out of COUNTY because of wrinkles that I don't want to deal with... believe me, I want to be "The Mortgage Go To Guy!!" for all of the AR Floridians but I know that it means that we both have to sacrifice some control that we might not be comfortable with...

do I know the Tampa/Clearwater Market sufficiently well to work with Cyndee Haydon??  I know how to originate loans in Florida... but I don't currently have a good appraiser in my networking circles over there.  I would just have to ask for a referral from Cyndee... I have been to both Tampa and Clearwater and think they're great places... but Cyndee has to be comfortable with me being 2.5 hrs away!... We are both Wildcats though so there's always hope!

Do I know the Bonita Springs Market well enough to work with Chris Griffith??  My brother in law works for a developer with several communities over there... so I have a leg up.  But Chris has some great friends and connections in her tour of duty in that market so getting her to take a chance when I can't be there full time to service her and her clients is a big "if" to a veteran agent!

Do I know the Miami market well enough to work with Ines & Maggie?  Yes.. I've done many loans down there.  The drive can be from 45min - 2 hrs depending where and when I'm going.  I don't actively look for work there but I don't turn it down either... my processing office is there so I have the ability and the network... but again, Ines is a veteran and has a network already and I'd have to shake things up!  But...it is within handshake distance!

Do I know the Orlando market well enough to work with Colleen K?  I did a really tricky commercial deal there a few months back.  Never got paid on it either because it was SUPPOSED to be a gateway to more deals but the client and I had a language barrier so he's dealing directly with the company president.  Through our discussions on the phone, though, Colleen and I have a lot in common and that means that I would definitely drive up there now and then to be on the spot for her.

I am from Louisville KY... and I got a referral from Brandon Jenks there... a TRICKY commercial deal. On my last visit I tried to cut through the politics to make it possible to help on this deal but it was a very hard sell for the lenders so it not only never came together but the two partners have since parted ways!  Good thing it didn't happen $5-10K into the processing!  My dad has a land surveying company in Louisville so I have builder/developer/agent contacts all over the state.. .but I'd rather just refer out my business and have a great cash flow that way than to try and end up not doing as good a job due to a regional nuance I didn't know about!

So... I support your mentality.. and toss this one back at you...

I had an appraisal once come in WAY WAY low... the National Appraisal company that the company I used to work for hired sent a guy from the Central Miami area all the way to the North Palm Beach Area... two markets that couldn't be more different.  His appraisal on a house that legitimately comped at $750,000 was $480,000... I had an argument with the president of the company in Nebraska... a HEATED argument that it was wrong to send someone that far out of their comfort area to do an appraisal.  That appraiser just did not know the market and did a poor job.  His response for me was "I'm licensed in 8 states... I'd feel confident in my work in all of those states and all of those markets"...

I responded that I have a real estate broker's license too... and while I CAN sell a home in Jacksonville - that doesn't mean I'm giving my client the best service possible because there is just no way to master markets when you're not actively servicing them full time...plus - as a full time mortgage broker, I do NOT spend time using my real estate license because it would just make my ability to service any of my clients that much harder.

Which... substantially supports your claim an an expert...but that you wouldn't do another island/county in Hawaii...

sorry... hope this wasn't too bad a threadjacking :)

 

 

Posted by David A. Podgursky PA, THE PODGURSKY GROUP - Make the Right Move! (THE PODGURSKY GROUP @ Re/Max Direct) almost 11 years ago

Matthew - Great point!

Tom - Thank you for the response.  I think the problem is the client can initiate the complaint, but unless they take it Federal they have no recourse; kind of scary.

Lenn - Beside all of the things I have listed above, who will be at the escrow signing with you?  I want the loan officer there, otherwise the buyer will be on their own.  I am sure not going to explain their loan documents or why the loan is different than what they were promised.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Diane - What would happen if it went bad?  Who was at the signing table explaining the loan documents with the buyer?  There are no quality loan officers in Phoenix with low lender fees?

Do you see where I am going?  The first question is huge.  If he does not have a license in Arizona, who regulates his activity?

Matthew - In my case out of state lenders have been an even bigger problem with easy to do loans.  I have seen so many bait and switches that I almost want to throw up.

David - Good points.  Just because I can , does not mean I will.  I think the point that I keep repeating on several of my posts about professionalism is that there may be exceptions, but in general stick with one discipline, stick with the market you are an expert in and only refer clients to tested top pros.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
As Eric commented, I too cringe when a buyer insists on choosing an out of state lender.  There's never any confidence that the loan will settle on time or at all.
Posted by Brian Schulman, Lancaster County PA RealEstate Expert 717-951-5552 (Coldwell Banker Residential Brokerage, Lancaster PA) almost 11 years ago

I'm selling a modestly priced home in Knoxville, Tennessee and my California buyer insisted on using a Bank of America loan officer somewhere in California.

We're supposed to close this coming Friday and they finally ordered title work this past Friday with the local title company I recommended and faxed information to June 4th!

Several phone calls were not returned and when I finally just started pushing buttons on their phone system a live person finally answered and I asked them to please, and told me not to worry, "we've never missed a closing date." I'm worried because I know that's pretty unlikely.

I have a trusted and reliable local lender on standby just in case this transaction does not come together this coming Friday. Oh, and did I mention my buyers are not coming to closing, they're still in California?

Bank of America says, "no problem". Scary words to me.

Posted by Jim Lee, Portsmouth NH Realtor, Portsmouth, NH (RE/MAX Shoreline) almost 11 years ago
I like my clients to use local -- very local lenders as well.  However, that is just a starting point -- I give me clients a list of questions to ask the lender.  I want a lender that stays involved, keeps both the Realtor(r) and the client up to date, is pro-active and anticipates any problems -- I want someone who will monitor the loan and show up at the closing (or, if a conflict be available by phone).  Local lenders also have appraiser who are familiar with the east coast -- I had a out-of-state lender who had real problems with wells, septics and fire ponds -- because they were not common in the other state.  It just makes the transaction much smoother and I think there is plenty of business to go around.
Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) almost 11 years ago

Brian - That is exactly how I feel.

Jim - No problem?  I can not tell you how many times I have heard that.  It is time to worry!

Joan - I really prefer my clients use not only a local lender, but a funding lender.  I know this will be like a hot stick in the yes of the brokers, but I have seen so many bad pre-approvals from brokers that it makes me sick.  The problem is that so have the other agents in the area.  They do not treat your offers with the same respect.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

It's rare to see a loan office at a closing in MD or VA.  The closing officers or attorney explain the loan docs.  The forms are standard FannieMae.  I do schedule settlements when the loan officer is in their office because from time to time, there is a misunderstanding and I have to call them.  That's about it.

I don't want loan officers taking time form their office to attend closings.  I want them in their office verifying docs and working on approvals. 

 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) almost 11 years ago

Lenn... I go to my closings locally. And if you were to send me enough business, I would go to Md. Now, I am not saying this for you to send me business... lol   But a good loan officer would have already prepared their client prior to settlement. This is slightly off topic. But in reality, the problems that usually take place is when the clients rate and or closing costs are higher. RIGHT?  Or... the money isn't at the table yet for funding. Other than that, it's usually something else. I can be reached by cell phone daily. And I am on ALERT when I have a closing. Not alert because I know I will have problems, just in case they have questions. I could be here forever on that issue, in regards to lenders being at the closing table. Overall, some of us are that damn good, that it doesn't matter where my client is closing.

                                                                                                            jeff belonger

Posted by Jeff Belonger, The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans ( Social Media - Infinity Home Mortgage Company, Inc) almost 11 years ago

Lenn - In Hawaii we do not have attorneys at closing.  The escrow officer and the loan officer generally do the signing.  If there is a question on the loan and there always is, I do not want to be the one holding bag.

The difference in our closing process, is a good example of one of the areas we get in trouble with when dealing with out of state lenders.

Jeff - I have had to delay closings on more than one occasion because of problems with the loan docs and no way of reaching the loan officer.  I am sure you do not let that happen, unfortunately more loan officers are not like you.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Jim - I have the following 2 things to say about BofA:  1) they generally take a long time to originate loans, ie, I wouldn't ever go to them for a loan that needs closing in a week or two;  2) surprisingly, they DO close on time.  I've been verrrry worried in the past on loans in which I used them and they had everything done.

I'd rather not originate loans under that amount of stress!

- Tchaka 

Posted by Tchaka Owen (Galleria International Realty) almost 11 years ago

Randy, now I'm getting a better feel for why you titled your post as thus.  You have an escrow officer and LO doing the signing in HI - that's different from many other places (at least places that I'm used to).  Though i'm in FL, I'm from the Washington, DC area and most of my loans are VA or DC (I stopped doing MD).  And Lenn's response above rings true.

I also want to add that although I used to attend as many closings as possible, I realized that I'm more valuable in my office instead.  Case in point, I had a closing Friday afternoon that had a few minor hiccup with the docs right before the signing was to start.  My processor had to step out because her son wasn't feeling well.  I took over and took care of what was needed.  I could have done it from the settlement company, but it was a whole lot easier from my desk using my laptop and phones.

- Tchaka 

Posted by Tchaka Owen (Galleria International Realty) almost 11 years ago
Hey Randy, Very good discussion you have going here. I don't have anything to add but wanted to check in so I can follow the thread.
Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) almost 11 years ago
Hi Randy - Corporate Relocations often come pre-loaded with an out of state lender - but have always gone smoothly.  Brian Brady (of Active Rain and blogging fame) has helped our buyers with financing without a hitch.  It probably comes down to who the lender is, rather than where they are.
Posted by Tony and Suzanne Marriott, Associate Brokers, Serving Scottsdale, Phoenix and Maricopa County AZ (BVO Luxury Group @ Keller Williams Arizona Realty) almost 11 years ago

Tony nailed it......

Location has nothing to do with it....

 

Posted by Tom Burris, Texas/Louisiana Mortgage Pro - 13 YRS Experience (NMLS# 335055) almost 11 years ago
And another thing :-).... As long as the lender is competent - knows the rules, time-lines, laws, obligations, etc.  it really doesn't matter WHERE they are physically located UNLESS they physically need to be present.  A Hawaii based lender doesn't lose their ability or knowledge if they happen to be in California on vacation!  That said - it's unconscionable for someone to attempt to do business in an area outside of their expertise - would be like me doing a commercial industrial real estate transaction!  Even if the Loan Officer is "in state" - does that guarantee the Underwriter who funds the loan is also "in state"?  Enquiring minds want to know.... :-)
Posted by Tony and Suzanne Marriott, Associate Brokers, Serving Scottsdale, Phoenix and Maricopa County AZ (BVO Luxury Group @ Keller Williams Arizona Realty) almost 11 years ago
Jim Lee, I had the same experience with Bank of America. You have to go through a long menu before you get a live person.  They were late with our closing.  Now when I hear Bank of America I get a sick feeling.
Posted by Tim Maitski, Truth, Excellence and a Good Deal (Atlanta Communities Real Estate Brokerage) almost 11 years ago
I have heard the same thing. I haven't experienced anything like that though.
Posted by Christy Powers, Pooler, Savannah Real Estate Agent (Keller Williams Coastal Area Partners) almost 11 years ago

I have had some resistance from clients who found out that the lender's operations was out of state... so I am hesitant to use one unless it's necessary.

 

Great post!

Posted by Nattalie de la Mothe (Solid Source Realty) almost 11 years ago
Great article!  I really need to start writting with the bolding certain piece of text fasion.
Posted by Jordan M. Mackey, Overland Park Real Estate :: (Overland Park Real Estate (No association with Inc)) almost 11 years ago

Tchaka - My experience here has been if the loan officer is not at the signing they are probably not at the office either.  I enjoy nothing less than sitting at the signing table with a client who is upset with the loan docs and I am the only one there.  The last time a loan officer did that to me was the last time they got a referral from me.

B.B. - It looks like I missed some myself while I was out at an open house.

Tony - That may be quite different in your state.  In Hawaii out of state lenders are a nightmare.

I have never with a capitol N seen a smooth one yet with an out of state loan officer.  Our local regulatory agencies have no authority if they are not licensed here, leaving no recourse short of taking it to a Federal level. 

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Tom - Spend a month with me in Hawaii and I will completely change your opinion.

Tony - You hit on another good point.  The second thing I recommend is using local funding lenders who have in house underwriting.

Tim - It would be even worse if you were sitting in the middle of the Pacific several time zones away.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Christy - I hope top be able to say the same for the rest of the year.

Nattalie - If I have a customer thinking about the mainland lender; I mention how many papers they have to sign to get the loan.  I then ask if they feel competent to sign them themselves.  The loan officer will not be there.  It is amazing how many take my recommendation of using a quality local loan officer.

Jordan - Thank you

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Randy Aloha, woowww that is a very controversial very good blog, I would not say any word on this one because I have not had the bad experience about this, but this is an awesome blog to comment, also I just wanted to make another comment out of this topic,   do you know  BJ Penn? the prodigy guy?  he won the UFC this saturday and he is from hawaii :)    he won the ligth weight UFC championship, I Hope that you know him :)

Posted by Ray Saenz, Homes for Sale in Laredo, TX - Texas, Realtor (Exit Realty Laredo) almost 11 years ago

Ray - I do not know BJ Penn, but have enjoyed watching him coach on TV.  Glad to see he won his fight.  I gotta cheer for the local guy.  Here is his website: http://www.bjpenn.com

It may be slow because a lot of people are going there.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

I think you may have been somewhat misinformed by the public official who claimed there's no recourse, unless Hawaii has no licensing requirements at all.  As far as I know, each state requires lenders to hold a license to originate loans in their state, even though they may not have a brick and mortar location in that state.  If I have a license to write loans in Florida, even though I'm located in MA, I'm still subject to Florida laws.  If I fail to comply, my license is in jeopardy. 

Having said all of that, I'm a very strong advocate of face-to-face relationships and agree with your general point, although probably for different reasons.

Posted by Don Carter (All Star Mortgage, LLC) almost 11 years ago
I cannot count how many disasters I have had with out of state lenders, the majority of them from Florida.  Horrible, horrible stories including pushing back closing EVERY DAY for 3 weeks to show up to closing with a 3% origination and a 10% intrest rate
Posted by Jennifer Walker-Derby, Real Estate Extraordinaire (Re/Max Westside) almost 11 years ago
Jennifer - that has little to do with being out of state and everything to do with Florida.  At least S.Florida!  The concept of time here is a little different than the rest of the country.
Posted by Tchaka Owen (Galleria International Realty) almost 11 years ago

Don - I do not think they are misinformed she is the person who handles the complaints.  I will definitely be working with my local legislator to see if we can fix that whole in the law.

Jennifer - I have seen similar on more than one occasion.

Tchaka - I have seen similar coming out of other states like California and with some really well know lenders. 

We are in the middle of the ocean.  They will never have to face the client or anyone involved with the transaction.  Once they finally get the loan docs it is take or leave it time.  The loan officer is banking on the fact that it is too late to go elsewhere.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Unlike the U.S. in Canada our laws, guidelines, qualifications are very similar regardless of the Province.  I have the advantage of dealing with a single Lender here in Ontario that would also service all across Canada and would all be handled here, in house.

If you have any clients that are moving to Canada and or wishing to purchase cottage or investment property please give me a call or direct them to our website and if any member of my Team cannot handle them personally our network of over 1100 Mortgage Associates across the country can and with me running point I will insure your client referral will receive the high level of service we afford all our clients.

Warmest Regards, DAVE

 

Posted by David Yeoman (Mortgage Intelligence Inc. (David Yeoman)) almost 11 years ago
I am a mortgage broker & I prefer to do business in New York where I can best anticipate potential problems & avoid them.  There are so many nuances in each state, it is best for a loan officer to limit themselves to one  - or very few.
Posted by Sue Player (First Homestead Mortgage, LLC) almost 11 years ago
Normally I let my clients pick their own services (with options often provided my me) but one thing I "steer" them away from is out-of-state lenders.  Too much hassle and uncertainty - been burned at the settlement table (if we closed) before...
Posted by Jeff R. Geoghan, REALTOR, Marketing Manager (Coldwell Banker Residential Brokerage) almost 11 years ago

Dave - I have not had any clients move from Hawaii to Canada yet. I think it is too cold up their and the surfing is not as good.  :)

Sue - That is a good way to do business. 

As I mentioned before, I am licensed statewide.  Our laws are the same in all counties, except zoning and market familiarity.  I would never try to sell homes on the other islands.  I am not an expert in their market.

Jeff - I can not tell even one good story with an out of state loan officer.  I have had several loans with local loan officers and out of state lenders.  I have had mixed results in that scenario.  Some good and some really bad.

 

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

I would love to forward this blog to the next real estate agent who says, "oh I don't really care who does the buyer's mortgage - they get their own financing".

If you ask the buyer if they would like a name (or a few names) of reputable mortgage brokers, they may end up using one of them, and they will most likely treat you and the buyer very well.  If they don't, there are pleny of us lining up to do it well! (and cheaply)

Posted by Sue Player (First Homestead Mortgage, LLC) almost 11 years ago

Sue - I just came back from an escrow signing that will record on Friday.  The transaction went smooth as silk.  Thanks to a really great local loan officer, who conducted the mortgage signing personally.

I can not say the same story when clients have used an out of state loan officer.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
I also dislike working with big banks.  They seem to drop the ball too.
Posted by Jeff R. Geoghan, REALTOR, Marketing Manager (Coldwell Banker Residential Brokerage) almost 11 years ago
Jeff - I have found that the banks in Hawaii have been very good to work.  There is one big exception that to that statement.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
That's good.  It's hit or miss here which makes it hard for me to recommend them unless I know it's going to be an A paper loan.
Posted by Jeff R. Geoghan, REALTOR, Marketing Manager (Coldwell Banker Residential Brokerage) almost 11 years ago
Jeff - I have heard similar comments from agents from other parts of the country.  I guess on that respect we are pretty lucky here in Hawaii.  The mortgage brokers and credit unions here on the other hand have been all over the map, from great to run for the hills. (mostly run for the hills)
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
Out of state loan officers are the worst as far as my own experiences are concerned. They are more like processors and dont have much knowledge of their own loan programs and what exactly to do to fix any problems that might arise. My advice avoid at all costs an out of state loan officer.
Posted by Adrian Alvarado, Inland Empire Real Estate (MGR Real Estate Inc.) almost 11 years ago
Adrian - I think most of us are on the same page there.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
You can't run too far in HI...
Posted by Jeff R. Geoghan, REALTOR, Marketing Manager (Coldwell Banker Residential Brokerage) almost 11 years ago

Jeff - Not far at all.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
Out os state loan officers usually have their hearts in the right place but may eventually hurt the deal by not having the local knowledge so crucial to many deals.  My buyers' out of state bank said " he was good for anything he wanted."   Two days before closing he calls and says that his underwriter is not familiar with condo/hotels and cuts the guy loose !  Managed to save the buyers' deposit and the sale but promised myself not to find myself in that spot again ! 
Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) almost 11 years ago
Bill - Don't you just love that the information they had from day one is only a problem 2 days before closing.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
Randy - AMEN!  I'm glad you said something. I've my my clients solicited by out of state lenders (those TV ad ones) and not only do they get taken advantage of, they never get explained the process thoroughly and of course when the client tries to call them they are hard to get a hold of.  Yes, ask for references and do business with someone you can shake hands with and has an office you can visit.
Posted by Pete C, Hawaii Mortgage Loan and Refinance (TBA) almost 11 years ago
I have one right now where I represent the seller.  The buyers is now in breach of contract.  The final loan approval is past due and we haven't even seen a conditional loan approval.  The buyers want the home, the lender may cost them the home.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Pete - In all fairness there needs to be a distinction between "out of state lender" and "those TV ad ones".  Granted a Venn diagram will show a crossover area, it is nevertheless wrong to lump the two together.  It is pretty uniform amongst loan officers/brokers that "the TV ad ones" should be avoided.  And there are numerous lawsuits out there to back that up.

- Tchaka 

 

Posted by Tchaka Owen (Galleria International Realty) almost 11 years ago
Tchaka - None the less out of state lenders have been a giant headache in our market.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
I like to work in my local market and have turned down out of state work if it look like it was going to be hairy
Posted by James Hoben almost 11 years ago
James - My experience here in Hawaii, is it is always hairy when an out of state lender gets involved.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Randy -

I just had an upset seller who had NO IDEA how much money to bring to closing.  They were doing an 80/20 loan to hold them over while their out of state home sold...

Guess what??? NO GOOD FAITH ESTIMATE WAS PROVIDED!

Thank goodness for wire transfers.  I feel for this large family living in a hotel with four children.

Fortunately my title officer understood the situation and took the opportunity to let this CEO know what SHE thought of out of state lenders... so hopefully anyone else he brings in will be warned.

Seems like the produce we get... gee nobody else will buy it, send it to Alaska or Hawaii... only you can grow your own in many instances... but you get the idea.

Posted by Debbie White (Southeast Alaska Real Estate) almost 11 years ago
Debbie - I agree, we are so far removed that they don't feel they will ever have to face us.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago
Randy, I wouldn't even try to lend that far outside of my  of sphere influence. lol I think is always best to eat local, spend local and borrow local.
Posted by James Hoben almost 11 years ago
James - I feel the same way.  I try to support the local folks when I can, they will be here after the transaction has closed and have a vested interest in a satisfied client.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) almost 11 years ago

Hey, Randy:

Texas lending is weird and different from that of other states, so I cringe whenever my buyer has an out-of-state lender. Or out-of-town, for that matter, although that is sometimes easier to deal with.

Sometimes there's no substitute for local knowledge and experience. 

(my old apartment on Anapuni St.)

 

Aloha,

Robin

Posted by Robin Rogers, CRS, TRC, MRP - Real Estate Investment Adviser (Robin Rogers, Silverbridge Realty, San Antonio, Texas) over 10 years ago
wow!!  94 Comments on a post you did 6 months ago!  Anyway, I always stress to my Buyers the importance of using a local lender as they know the market better and has the experience than an out of state lender doesn't have.  Plus, the local lender sometimes can tailor packages to the market for the local Buyers.
Posted by Rick Tourgee, Provincetown and Cape Cod (Robert Paul Properties, Inc.) over 10 years ago

Robin - I used to live on Anapuni St. in Honolulu about 25 years ago.

Rick - All good points.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 10 years ago
I can't agree more with James' comment that it is "best to eat local, spend local and borrow local".  Please remember us mortgage brokers/bankers who were good when you have the opportunity to recommend.  If you don't, we may not be there next time you need someone.  I always am on the lookout for great real estate agents to recommend to my customers, and think the best most experienced local agents are worth their weight in gold.
Posted by Sue Player (First Homestead Mortgage, LLC) over 10 years ago
Sue - I normally try to stick with funding lenders.  Almost every problem escrow where the loan was the issue that I have been involved with, a broker or out of state lender was used.  I can count on one finger who many bad ones I have dealt with when a local funding lender was involved.
Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 10 years ago

No way, man!

I have many happy memories of Anapuni St. I met my best friend there, and had a party where I introduced her to the man who later became her husband. Good karma!

Aloha,

Robin

Posted by Robin Rogers, CRS, TRC, MRP - Real Estate Investment Adviser (Robin Rogers, Silverbridge Realty, San Antonio, Texas) over 10 years ago

Robin - I was young and poor when lived there.  I did have fun though.

 

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 10 years ago

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