When you make the decision to purchase a home, there are generally three types of financing you can opt to use to pay for the home: Cash, owner-carry, or obtaining a loan from a mortgage broker, lender, or loan officer. Chances are that you are least likely to pay cash, finding an owner to finance the purchase limits your choices in which home you would like to buy, which leaves the most popular choice: a mortgage loan. There is one very important thing to remember when looking for a lender or mortgage company - they are in the "sales" business. This is not to say that there aren't honest mortgage professionals in the industry - because there are many truly honest mortgage professionals. But because your purchase means part of your purchase price will include the paychecks of several individuals.
There are many loan officers and brokers that would like you to believe that they are not in a sales related industry, but that would be far from the truth. The reality is that all mortgage brokers, lenders, and loan officers have products that they offer, and if they are a successful sales person, their customers will "buy" their products. I have been involved in the mortgage industry for a long time, however, I believe that consumers have the right to make an informed decision about their purchases. I found a very commonly worded advertisement on Craigslist.org this evening, and thought that I would share something that I found interesting (and common) in the ad.
"Credit score is a big factor as a qualifying tool, but it's not the only one. There is a lot more to it than that and I would be happy to go over with and show you your options. You may qualify for more than you think. So give me a call for a complete NO cost evaluation even if you simply have questions." The first thought when I read the ad is that there are people out there that have bad credit, which could indicate that a buyer is not financially stable, and they are offering to find the most money available for a buyer's purchase. Okay, so in other words, more debt on an already financially strapped individual.first time buyer who does not know what they can or cannot afford, it may mean they are more likely to end up with a low introductory rate that leads to a future rate hike - and a mortgage payment that they can't afford to maintain.
Beware of Lenders That Promise the World
Reader Comments
(Page 1)2. There is a Special Agent of the FBI by the name of Ryan Dutter who was a Regional Manager, ex-loan Officer that is leading the way on the white collar task force against mortgage fraud. He just finished an investigation on a long time friend of mine in the industry, and recommeneded heavy fines for her documentation errors. When my friend asked if she could spend time in jail, his response was: "No, I have MANY people in the industry I am saving criminal prosecution for...I will simply fine you and have a one year review..."
The bottom line is, this guy has a long list of associates in Wisconsin, Illinois, Ohio, and Michigan that he is targeting...if you know the name beware! According to my friend/associate he was enthusiastic about the next "case" involving someone he knew, and discussed it openly.
Jennifer Stevens.
Posted at 5:49PM on Jul 21st 2006 by Jennifer Stevens
3. Thank you for your input Larry. There are days when I am feeling very passionate about a subject, but hesitant to speak the truth. But I must try more often to remember that to speak the truth may offend some people, but is never the wrong thing to do. I truly believe that if more people learned to view the mortgage industry as a "sales business" they would see things in a whole new light. People have learned to trust mortgage broker more than the used car sales person - but consumers should be equally wary and concerned with the integrity of the individual they are working with on ANY purchase.
4. I just dropped in again. Thanks for the response. I saw a post in the inisdebayarea.com website on more bi lingual loan officers needed. It set off an old siren of how hard it was to monitor and keep in check some of the loan officers I employed. Some of the worse spoke Spanish. I wrote about in on July 17th. Your article reminded me of it. LarrY Crgun
Posted at 7:11PM on Jul 23rd 2006 by Larry Cragun
5. I hope referencing the article is ok with you. Let me know if not. Larry
Posted at 7:12PM on Jul 23rd 2006 by Larry Cragun
6. Hi Larry,
I think it's wonderful that you would like to bring the article to more readers is a wonderful thing. I hope that there are readers out there that this can be helpful and useful to, and hope that more people in the industry shed light on the same and similar subjects.
Thanks again Larry.
Posted at 10:48PM on Jul 23rd 2006 by CJ
7. You can never be too careful when choosing a mortgage lender. Even if the mortgage terms and rates look reasonable at the beginning, lenders have many ways to trap you into a mortgage that ends up having exorbitant rates in the long run. The website www.personalhomeloanmortgages.com provides a directory of lenders throughout the nation along with useful information about mortgage types that can help you to choose the right lender for you.
Posted at 3:02PM on Sep 6th 2006 by Emily
1. Great information. Not only is the loan officer a salesperson, the loan officer is a mini business. As such the higher the rate they charge the more money they make. Larry Cragun
PS: I will link this article from my site. Good Job
Posted at 1:06PM on Jul 21st 2006 by Larry Cragun