Sunday, February 19, 2012

Interview with Mortgage Broker Bill Rayman Part 3: Choosing a Loan Officer

How does someone choose the best loan officer to fit their needs?
First step is do research–look online, go to a bank, talk to a broker. Google “mortgage broker Los Angeles” and you get a list of brokers. Early on, do a little research and talk to a few different people.
The downside to working directly with a bank is that they are not there to help you. The bank employees don’t work for their customers-—they work for the bank. With a bank, if there is a problem and things go awry, it is going to do nothing to help you solve that problem. And in this restrictive lending environment, plenty goes wrong. A broker is only going to get paid if we make a transaction happen. Plus we have a license and a fiduciary responsibility to our clients.
People only think of “rate, rate rate”–it seems to be on everyone’s mind. The problem with rate shopping is that anyone can quote anything anytime. I guarantee I can find someone online who says they can beat any rate I can do, but it doesn’t mean anything. A quote at 1:30 on Wednesday is not a guarantee and could change anytime. Nothing is locked in until you have the applied and the loan registered.
The second reason that rate shopping is bad is that it focuses on the wrong issue. Getting a rate quote is one thing; closing a loan is everything! Because it is so difficult to get a loan you need to know it will close. You better be with someone who knows how to solve problems and get you to the finish line. These days, every loan has problems. If you’re just shopping rate, you risk being short-sighted, and to your detriment. My company is a bank, so intrinsically we have very competitive rates. And because of that price advantage I don’t have to focus on rates and I can spend more time helping people understand the process and loans so they can make informed decisions.
Another issue to be aware of online is that some of the companies to get quotes from are legitimate… some aren’t. The person shopping online has no idea who is and who isn’t. I have a list of anecdotes the length of my arm of people who went online to find a rate, but when they went to close, mistakes happened. The loan originator wants a higher rate or more points added. People making a purchase are completely over a barrel. They can’t pull out of a transaction because they’ll be at risk of either losing their deposit or losing the home. On a refinance, it might be worth the gamble but on a purchase I think it highly unwise.

I did not realize that about shopping for interest rates at a bank…

Go talk to a Wells Fargo manager–he’s got one thing on his mind. How does he or she get promoted? The answer is: by making money for the bank. It’s a zero sum game. If the bank makes money, it’s coming out of your pocket. At the end of the day, he works for the bank.

To See the Entire Interview CLICK HERE

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