If she’s not even had her credit run yet…well…that’s a problem

If she’s not even had her credit run yet…well…that’s a problem

It takes time to gather the borrowers documentation, vet the information including credit history, find the loan product(s) that best fit the time and circumstances, and go over the information with the borrower to allow her to select the loan that best fits her needs

“Best” is relative. Oftentimes, especially at larger institutions where an originator does not have the authority to alter fees or adjust rates beyond a certain threshold, it takes the threat of a competitor’s deal to move the mountains necessary to receive a better than “best” offer. Sales managers and sometimes branch managers might get involved. And that is not going to happen unless a borrower can show, in writing from another lender, the precise terms of the deal. Absent that document, the borrower will get the next best offer. Verbal claims are absolutely worthless. And given that all of this game-playing depends so heavily on time, there’s a risk that playing one lender off another over the course of a day could easily backfire.

As for telling an originator that you’re going to pick a lender and lock a loan “within the next hour”, no originator worth his salt would believe you. I’d laugh – out loud. Especially if, up to that point, the borrower took the advice from your first point.

And, when she’s ready to pull the trigger she can call each loan officer for her current rate and make a decision to lock immediately during the call

See click to read my response to your first point. A borrower should always always always shop a few lenders within the 4 week window, provide complete documentation (and let them run credit too). That way she can have multiple pre-approvals in-hand (assuming she even qualifies).

I want to state that I completely agree with your #1 above… I worked with a mortgage broker and specifically told her not to run my credit until we come to an agreement. She ran it anyway. Not a big deal as I have great credit but I wasn’t going to work with her regardless of her rate for being slimy.

I understand that you’re trying to convey your mortgage experiences, however each borrower’s present circumstance drives much of the lending process. Today you’re fortunate to have excellent credit, the required reserves and what appears to be sound financial responsibility. Not all buyers share your current context or level of fiscal responsibility. In fact, it is unclear whether your context was perhaps significantly different during those earlier transactions in which (in hindsight at least) you felt you were screwed. Your context would have affected the way your loans were structured, and your willingness to agree to terms that may not have been ideal but were acceptable under the circumstances. It’s difficult to say without and accurate and thorough presentations of earlier contexts.

Without a doubt there are disreputable lenders and brokers, just as there exists no shortage of disreputable borrowers. It’s less and “us” versus “them” and more “treat others as we wish to be treated” (as lenders and borrowers) is it not?

What stood out for me in this article, which otherwise shared some solid advice, was the following statement: “If you’re concerned the loan won’t close for some reason (sketchy credit etc), try to get your lender to pay these expenses.”

Basically, you suggest that buyers behave in exactly the manner they wish lenders not to behave toward them. If buyers are genuinely concerned their loans aren’t going to close (especially due to details they assumed they could hide from a lender), well, the risk should rest on their shoulders not the institutions from which they seek funding. I think we can all agree that this is not acceptable behavior for a borrower.