Before You Bash Your Mortgage Broker: Take This Test

June 07, 2009
Author: Janet Guilbault, Mortgage Banker/Broker

Test question: What do the following 3 situations have in common? Your answer can only be one word.

An increasing number of frustrated customers worried about closings and bashing complaining about mortgage people
Frustrated customers at dealerships who cannot get the cars/trucks they want.
I have been waiting for 2 weeks for Home Depot to deliver wood to rebuild a deck (when they told us it would take 2 days)

Mortgage people suck (too many words)

Car dealers suck (still too many words)

The service at Home Depot sucks (Nope)

The answer is CAPACITY, as in "so many people have been fired or laid off that there's nobody left to do the work."

Banks are overwhelmed and ridiculously understaffed
Car companies have closed plants and vastly reduced the number of vehicles that are being built. There are no cars in the pipeline!
Home Depot can't seem to find drivers to deliver our wood. They fired all of theirs and now contract this out.
When CAPACITY issues abound in the economy, the level of service invariably drops. You cannot deliver the same level of service without the PEOPLE TO PROVIDE IT.

Now, what does all of this mean to you. By the time capacity issues trickle down to you, all you see is a problem with your sale. And the potential for the deal to fall apart. And your blood pressure going up.

Never mind that closing a loan takes far more time and a far greater skill level than before. Never mind that banks are over the top when it comes to proving income, jobs, and assets. Never mind because hopefully you already knew this.

But it appears to me that mortgage people are being held to a standard that is not taking into consideration the STATE OF THE MORTGAGE INDUSTRY:

TURMOIL (from short sales, modifications, and foreclosures)
TRANSITION (from mergers and layoffs)
OVER-STIMULATION (from low rates and tax incentives)
You think your mortgage person is wasting time?

Did you know extending a lock on a $500,000 loan with Wells Fargo costs $150 a day? Do you know who pays for that most of the time? Borrower (Rare) Realtor (In what life?) Mortgage Person (Bingo!)

Did you know it takes 9 business days of waiting just to get the underwriter at Wells to LOOK at your file? And that's because it is a purchase. A refi takes 21 business days.

So, you say, send the loan elsewhere. You're a broker.

But guess what? The banks with the best rates have the slowest turn times since all the mortgage brokers pig-pile on those banks and lock loans there.

It will PAY to keep this in mind as we head into the the last half of 2009:

This is not going to get better. Buyers will be flooding into the market before the end of the year to take advantage of the tax credit. Lots of people still need to refi. More foreclosures on the horizon.
Get in tune with what is going on.
Ditto for contingencies.
Seek out skilled mortgage people. Be pro-active. Not reactive when they don't meet your standards.
We have not abandoned you because of refinances. Purchases always take priority for banks and for mortgage people.
Your mortgage person has no control over the appraisal with new HVCC rules.
Who said it wouldn't be stressful? Expect delays as banks pile on last minute conditions.

The test is not whether you are satisfied with the mortgage person. The test is if the client is satisfied with the transaction when you hand him the keys to his new home.