Hawaii Randy's Real Estate Opinions: Shopping for Mortgages

hey, Randy, I resemble those remarks.  thanks for sharing.  I hope to visit your state soon. 

Dave - When you come to Hawaii look me up.

Randy - Time for bed, but interesting.  Some points I agree with, some I don't.  I'll be back.

well said and I agree.... I just switched from the broker world to a national lender.

Jason - One thing for sure, it is my opinion.  :)

Bryan - Your company is one the of the lenders I work with and have had nothing but good experiences with them locally.

Randy, I couldn't agree more!  I just had one deal go south and another deal just about went south: 1) out-of-state lender 2) mortgage broker.

Well, you know me....as long as they're good....and i've been working a lot with one particular mortgage broker for almost five years. We work very well together....and he always gets the job done.

The one thing that really hurts a closing for my clients is an out of state lender. You covered it very well! It seems we never can close on time with a lender from out of the area...

Some really valid points - well said. 

Randy -  Ok, I'm back:-)  Since I'm a Mortgage Broker, I'll stick to my thoughts on your thoughts about dealing with such.  If I hit on the rest, well, we could be here all day long.

A mortgage broker:

• A pre-approval is only an opinion from someone other than the folks who will ultimately approve they loan.  (Unfortunately, you are right here.  Pre-approvals were based on a 1003 Application & Credit a lot of times without any supporting documenation from the client.  I've found this be the case on several occassions.  Personally, if I don't have supporting documentation, all the client has is a Pre-Qualification ... which holds little merit.)
• In most cases they charge higher fees than the banks (Disagree here.  Rather than go searching for stats on this ... I'll go on experience.  That's probably what you are going on as well.  If priced fairly & competitively, I can count the number of times I've been beaten by a bank (legitly) on one hand.  Of course, there are exceptions but I've found that to be the general rule.  I can typically close with a better rate too.)
• Their agents are paid a commission based on how much they can run up your bill. (Unfair assessment on the motivation of the Mortgage Broker.  There are bad and desparate folks, in any commission based occupation.  Again, you may be going off your experiences but I'd hate to make a similiar generalization of about Listing Realtors who are putting somebody's home on the market.)
• Many times the Good Faith Estimate and the actual loan do not resemble each other. (I've seen this across the board, no matter if it's a Mortgage Bank, Direct Lender, Broker, Savings & Loan Company, etc.)
• If there is a problem with the loan, you may not find out until very late in the process. (I've seen this happen and experienced it.  If the lender changes their mind or there is a 'burp' in underwriting ... it could come last minute, which I loathe.  That said, on the other side if something goes wrong with the loan last minute at other entities ... it may just get turned down.  Where, in our case, we at least have the availability to place it elsewhere.)

All that said, I would eventually like a line of credit in special cases and situations, to simply enhance our ability to service folks.  I'd never want to lose the availability of options, but it would be nice to be able to fund loans here and there as needed.  I appreciate your perspective Randy, and I can see where you are coming from with a lot of this.  Hopefully, this stuff continues to change to better service and educate people.  If I was in Hawaii, I'd work like the dickens to try not only to earn your business ... but change your outlook on Mortgage Brokers.

Randy as you know I work for a direct lender, and  the easyest compition that I have out there are Mortgage Brokers especially if they are out of state, or better yet Internet Lenders. EVERY Good Faith Estimate that I have seen from them, when I  put it up against mine, they are  ALWAYS a lot higher, I have yet to find one that wasn't.  As a direct lender I have easy access to everyone that will be involved with the loan from the time it comes in the door until it Closes.  If my Underwriter has a question, or I have a question, we talk to each other face to face with documents in hand, no guess work as to what we are looking at or talking about.  The same thing throughout the process, and no last minute surprises.

David M. - That is a common theme.

Sally - As long as he gets the job done.  I prefer the lender who does the funding for the reasons I listed and a few more I can think of.

Charles - I absolutely hate when I get a contract with an out of state lender involved.  It is rarely good.

Gary W. - Thank you

Jason - I knew you would be back.  Let me try to respond to your points as best as I can from my experience here in Hawaii.  It may be different in other markets, but from the responses I have gotten here and on other posts, I think it is the same most everywhere.

1. I agree a pre-qual is next to worthless.
2. I have only seen a tiny minority of the transactions with mortgage brokers where they charged the same fees as the banks.  None that charged less.
3. You are right, I am going off my experience and in my experience I consistently see a pattern of behavior from brokers, where they sell products good for them and not for the clients.
4. The GFE from the primary lenders I work with, always resemble the actual loan except in the case where the buyers credit worthiness changed.  Things like buying a new truck or quiting their job.  I can give several horror stories of bait and switches from brokers and out of state lenders.
5. The statement the broker has the ability to go somewhere else.  The loan officer at the funding lenders I work with have the same ability, with normally lower fees.  The difference is they take it to the underwriter up front and red flag any potential problems up front.  That has not been my experience with brokers both both locally and from out of state.
6. If you moved to Hawaii; being a quality loan officer I would encourage you to hang your shingle with a funding lender.

Thank you for your thoughtful responses to my post.  I am sure you are very good at what you do.  With the experiences I and my clients have had; it is a simple choice.  Not one customer complaint in the last 5 years towards the loan officers I recommend who are with local funding lenders.  More than I can count with out of state lenders and brokers.  it is not even a close call in my business.

I know many real good mortgage brokers in my area.  I can not with a clear conscience recommend them to my clients.

Randy- With so many people looking closer at lending today this post brought some good discussions out.  Here in my area the local bank doesn't seem to give loans any better, or cheaper than the Mortgage Brokers.  I am a firm advocate of knowing who you work with, and having a good line of communication open.  That being said, all of us usually recommend on our "own" experiences ........

Kathy - So true about recommending on our own experiences.

Several of the top producers in my area require a loan letter from the funding lender when the buyers are using a broker.  We all have seen so many bogus loan letters.

Randy - so often lenders will call us and say "Try us out." Sorry - I don't use my clients as guinea pigs. I'll often suggest that they send us a pre-approved buyer that we can find a property for and accordingly "try them out". It's a different situation, of course, when you've developed a trust, virtual or local - I'm talking about cold calls.

Sharon - I am with you, my clients are not guinea pigs.