Dear Loan Officer,
I want to thank you for contacting me on the purchase of our new home. We are just so excited... our emotions are running wild and just can't believe that this dream will come true. Because of these emotions, we can't think straight. So we really are thankful for your expertise, knowledge, for asking us the right questions in making sure that we are getting a fair deal, not the best deal. We just want to be taken care of and just want no hassles or problems at the end.
But we have some questions for you Mr. Loan Officer. We actually had time to gather our thoughts and speak to my brother who is a loan officer, but can't do loans in the state that we live in. I went over everything that you went over with me and I have some huge concerns. These are the things that my brother said that we should have been asked by you or should have been received by you.
- You never asked us our goals, when you pre-qualified us. You never asked us how long that we might live in the house. You never asked us if we had kids? If and when they might be going to high school and or college?
- You never asked us what mortgage payment that we would be comfortable with. But you did tell us very quickly how much that we could qualify for. After going online to compute our payments, we aren't comfortable with that type of payment.
- You never even volunteered a rate or mortgage payment. I slightly mentioned about this, but you said..."our rate would be a good rate." I passed this information onto my brother and he just chuckled. He said, "sure, a good rate him might be a bad rate for us.
- Lastly, we don't even really know what our costs are. My brother said that you should have supplied us with a Good Faith Estimate. Even though we didn't do an application prior to being prequalified, we still should have received a good faith estimate just to give us an idea.
Mr. Loan officer..... after reviewing all of these details, we feel like you didn't have our best interest at hand. I have now spoken to 3 loan officers today and at least 2 of them asked me my goals, what payment that I would be comfortable with, and 2 of them supplied me with a good faith estimate.
On another note, all you did was assure me that we were approved and wouldn't have a problem. These now sound like Red Flags that I should have been aware of. Most importantly, my brother asked how we could be approved, when you never took an application with us nor collected our documents, ie: pay stubs, W-2's, and bank statements. We were only pre-qualified, but you said approved. There is a hug difference.
Overall, we now have realized that it doesn't matter how big of a company that you work for, considering that you are the second largest lender nationally. It comes down to the real professional, a true mortgage professional that not only is knowledgeable, understands the basics of mortgages, has our best interest in hand, will not hide information from us, but who is passionate in what they do and truly loves their job.
Thank you for your time, but at this time, we wish to withdraw our application,
Mrs. Consumer
PS. to the readers.... this is based on a true phone call that I had with a consumer on Friday, who was just told that they were approved and that he would give them a good rate.
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For all of your mortgage needs and for more information on FHA loans, please go to this link. The FHA Expert
For more information on how you can obtain your dream home, please click here : Mortgage Financing Options
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!!
Copyright © 2008 by Jeff Belonger
Hey Jeff, how the heck are you?
I honestly thing a big part of the problems people have currently stem from the fact that they just got a loan because the "could" and no one asked, "where would you be comfortable with a monthly payment" That has been part of my conversation with every buyer for years... But the "car salesmen" that jumped into our world just never "got it" it is about the customer, and the relationship, not the pay check
Jeff, Another terrific post ! So many buyers end up with financing which simply doesn't fit !
Jeff
great post, I learn from yours and I know what to ask from years of reading and learning. I am glad that a lot of the mortgage brokers out there are falling by the wayside
Dave
ROB..... I was like, who is this friendly person asking how the heck I was doing.... and then I saw your name and said...no, is it? It was great catching up with you. What, it's been 6 years?
On another note, since you have been doing this for over 20 years, you know exactly where I am coming from on this and understand it all too clearly. And you hit the nail on the head, that many got a loan, because they could. But the conversation never got to..."mr. consumer, what are you comfortable with". It was nice talking to you a few minutes ago and thanks for the comment. Hope to see you around.
BILL...... thanks for the kind words.... and you are correct, even though the consumer can say no, because it is so emotional, they end up with financing that does not fit. We as loan officers, need to educate the consumer and ask the right questions. Many don't know how to do either... part of this is about pride though... common sense should tell them to ask these questions.
DAVE.... thanks for the polite compliment. I love sharing this kind of stuff for several reasons. One is to educate the consumer and the other is to vent some or to rant. But in regards to your last statement..."I am glad that a lot of the mortgage brokers out there are falling by the wayside"
I don't think as many are falling by the waste side as should be falling. Just my .02. thanks for your input.
Jeff, I am really thorough with my buyers. I make sure they totally know what is going on, especially with the loan. After all that is the most important part of the puzzle, the money. Anyway, I totally agree with you on these points, the other thing that drives me nuts is the use of lender lingo like everyone knows what the heck it means. If they are first timers, some lenders should be sensitive to the fact that this might be their first exposure to such language. Great post.
Great post for Consumers. I would advise any consumer to cut and paste your post to an email if this remotely even smells like the situation they are in. I would pay your .02 to see the reaction/retort of the other LO:-)
Great Post! I am always shocked at clients that come to me from another lender and have never received all of the information you posted above.
John Thomas - Certified Mortgage Planner
Jeff, this is a story that I hear way to often. It is sad that a loan officer loses a customer because of this. but it is what should happen.
I'm seeing more and more ads from mortgage brokers that seem pretty unbelievable. I just keep wondering how these mortgage brokers are going to follow through with these empty promises.
Great pointers Jeff, especially for those consumers who are first time home buyers and don't know what to expect.
AUDREY...... yes. some loan officers use the mortgage lingo, aka the mortgage language, to their advantage. Just as they don't tell the consumer everything, so that consumer is not dangerous when shopping. The less they know, the less dangerous of a shopper that they become.
JASON..... that's a great idea... I would love to see any and all consumers to send this to their current loan officer and see what they say. And I would pay $50 to see those replies. And thanks for the polite compliment.
JOHN..... it's amazing and not to put blame on the consumer, but why don't they just ask and or demand for a copy of the GFE... or at least ask what their rate and or payment is, even if it's over the phone. It just doesn't make sense. When you buy a car, don't you ask to see your payment and what rate they are offering? Why not with a mortgage? Thanks for the kind words also....
DANNY.... and what's sad is that I am hearing more of these stories now, than I did a year or two years ago. Are loan officers getting more desperate? Do we have more with no experience in the market now, than we did a year ago?
LISA H. ...... what kinds of ads are those? But yes, empty promises, there seem to be so many....
LISA R. ....... thanks for the compliment. And yes, first time homebuyers should definitely read something like this. I have one that looks like he is going with the other lender, and that particular lender never gave him a payment or rate when they first spoke... but they must be making some great promises, that will probably be broken.
Jeff,
Great consumer letter...lots of lessons to learn...and imagine, taught by a little old consumer!!! Thanks, Fran
Jeff - great post. As a real estate agent, I always find out about their prequal status - request a Good Faith from the Lender, and my line is "Well Jeff says you're pre-qualified for up to X dollars at a payment of X dollars.... but where do YOU want to be as far as payment?" I tell them I don't want them to be house-poor - with lots of house, but eating pb&j for the rest of their lives.
I always appreciate a good mortgage person with the skills to make sure my clients don't let their heart run off with their pocketbooks.
Jeff...this is spot on. I'm going to elaborate on this in my next LO meeting. I don't know if you have them or not, but I do some public speaking. We should consider getting a "masters group" or circle that you can rotate speakers to help sharpen each other. I'd do it for others, but it'd be cool to have others speak to my peeps as well. Your thoughts?
You made some great points in the post! I often run into the same thing. How can someone be pre-qualified with out even taking an app?
I recently had a guy tell me he was pre-approved through his credit union at 5.875% on a 30 year fixed, 100% loan for $195,000. He made $35,000/year. Hummmm....
FRAN...... lessons learned and in my opinion, the basics to shopping for mortgages and what should be asked.... everytime... just the 3 basics, rate, payment, and here is your GFE... it's rare that 1 out of 3 even get mentioned now and the consumers don't even ask about the first two.
SHEREE..... it's good that you follow up, but I am sometimes leery of a realtor that asks too many questions, especially when telling a client of mine that my good faith doesn't look good. With today's major changes to price hits because of fico scores, a realtor just can't know and if dealing with a very good loan officer, could upset the deal also... I also don't work for free and don't need some loan officer coming in to uner cut or under bid per se, when they might not ask the right questions. Just my .02. In any case, thank you very much for the kind words.
LARRY..... thanks.... and in regards to speaking with others, I wouldn't be opposed to it, but it would have to be done through a conference call, unless you want to pay for my airfare... ;o)
JENNIFER.... hhhmmmm how can someone be pre-qualified without taking an application? Easy.... I ask them for their social security info over the phone, their income, and assets. Maybe I just misunderstood you. But to me, those are questions that should be asked and not an application. And thanks for the compliment...
I'd love the air fare idea, but definitely a conference call at some point would be awesome.
Jeff,
I sure think there are a lot of folks who wished they had written this letter several years past. Great post and thanks for sharing!
So Jeff,
Does that mean you got the deal?:) Sounds like they didnt like that you didn't ask about the dog:)
LARRY.... sounds good... maybe we talk a week after Memorial Day weekend, since that is the last week of the month. thanks
DIANE..... I think this should be a standard letter that gets sent to the consumer before they even speak to a loan officer. I would then wonder how many loan officers would get hung up on if they didn't even ask 50% of what is mentioned, including the GFE. And this is not talking with an ego, but someone with 15 years of lending experience.
NEAL.... well, she said that she would go with me. But maybe until someone comes along with a better promise? It has happened before... ;o)
Jeff, I'm thrilled to see this post as a feature, it's very well deserved. I am still reading about dishonest practices and consumers need to be more aware now then ever.
CAROLE...... consumers just need to be educated and not believe everything that they hear. Thanks for the polite compliments.
MELISSA...... thanks for the compliment. Rate callers? I don't get them as much. I guess it all depends on how you get your business. But yes, when they don't give you enough info, how can you compare. Did you ever tell a consumer that you can't help them then? Don't be afraid to lose business... try it. In many cases, they change their attitude quickly.
On another note, I might have beaten you to the punch line with your request. Please read :
An Open Letter to the Consumer - Show me a little respect Thanks, jeff
Jeff,
Thanks for the post. I had a similiar situation with a borrower who went to the bank to get approved. The quoted insurance was 70 dollars lower than actual quote, the taxes were 125 dollars less than quoted and they did not include the hoa fee of 95 per month. They did not ask him for documents but went ahead and sent him an approval letter. I guess that is better than the response to what is the rate (that is the percentage the bank charges you to borrow money or what are my closing costs that are the costs associated for doing the loan).
Jason Holter Prolending Mortgage
Jeff, another great and true post. It is all about the Customer and their needs and goals. People come to us for Professional service and direction. We are no different than people to a Doctor, Dentist, Mechanic, etc. We are here to provide the customer with professional service , but most importantly, listening to what they say and need. Have a great day !
Was always taught to sell the mortgage payment, not the rate. I spend a lot of time with my clients. I hold my clients hands throughout the whole process. I always explain everything to them and ask them if they have questions. They can review what I told them, go home, think about it and should questiona arise, they can always call me either at work, on my cell and yes even at home if they wish.
I provide outstanding customer service, the same type of service I would expect from any person i dealt with.
UNBELIEVABLE! I seriously can not believe that these people are still in business. Kudos to the consumer who knew he could look a different direction.
Jeff,
Good Post, has some valid points.
We are professionals and should massage the necessary info out of the clients to help THEM make the best decision regarding their financing needs. However, in todays web-based society a little bit of personal responsibility regarding research on the most important investment in most peoples lives would be in order, but very seldom ever happens. So, what I guess I'm trying to say is that the potential borrower in your posted letter had a great resource availble to her from the start in which she should have asked, (done some research), what should I be asking and what do I need to get in order to properly apply for a loan? In my opinion she should have used that resource before speaking with others about pre-qualification as well as after. She would have then been armed with some knowledge to help ensure that she was not so easily duped.
And just for the record for those that don't know. It is a VIOLATION of Federal Law - The Truth in Lending Act - to quote a rate without an APR.
My assistant must have spoke with the same loan officer. She eventually closed but we had to change everything about her loan so she got a good deal and the loan officer made a little less.
Wow, this is an interesting post. It made my stomach turn. As a By Referral Only Mortgage Consultant it is part of our training to ask our borrowers what their "ultimate scenario' is..... how do they want the lending experience to look from a process and how do we want it to look from the product. I know no other way to do business. I am significantly appauled at how much loan officers can take for granted when working with a clients home and personal wealth..... it should be taken more seriously. I know I have limited competition because I strive to be a consultant to my clients, not just a wham bam thank you mam kind of a lender.... I am sure you do the same for your clients jeff... good post.
Great post! This is so very true for a majority of Brokers and loan officers.
Great post that really shows the inherent problems on BOTH sides of the equation....Loan Officers that don't know how to properly qualify their clients, and clients that don't know how to properly qualify their Loan Officers!
In a perfect world, everyone would have perfect knowledge and we would never get involved with people we have no business getting involved with, but alas, its not to be.....
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Jeff,
The real world of financing has its perils. This is very realistic as to what happens out there. Keep it up amigo!
Regards,
Richard David
Federal Funding
richard@fedfund.us