If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
Moe Bedard from loanworkout.org defined it best,
I think we are just a bunch of consumer advocates that are hell bent on exposing the truth.
I know I am and I’m sure my colleagues here feel the same way! With that said, onward we go…
To quote my fellow colleague Graeme K. Brown in an earlier post:
The unsuspecting homeowner has a difficult job too. They need to sort through emails, phone calls and direct-mail pieces to find the right person (company) to secure a loan for them.
How do you know when you’ve found the right person/company? Who will uphold their fiduciary duty in servicing the client; integrity in tact?
- We have the W-2 employee working under the appropriate licensing of their broker
Then,
- We have the National Association of Mortgage Brokers who offers (3) three levels of professional certifications
- We have the Mortgage Bankers Association of America who offers similar certifications
- And lastly, we have the Certified Mortgage Planning Specialist designation. Some will even venture to acquire the Certified Financial Planner certification
Now you might think, “go for the one with the highest designation, everyone else knows didly squat!”
Wrong!
This is where I say be careful & follow your instincts.
The thing is, looks can be deceiving! Like that slick Financial Advisor in the pin-stripe suit with those fancy print-outs. You think, “Wow, this guy really knows his stuff!” But really it’s all marketing antics brought by good looks and a little software.
Look for knowledge and understanding beyond “what” they are suggesting. Know “why” they are suggesting it and be sure that they know as well because it goes without saying, if they don’t know their “why,” you’re talking to the wrong professional.
My suggestion…
Ask for referrals from the following sources:
- Your Realtor: a colleague of mine said, “the proof is in the pudding…” Certainly a Realtor has worked with a couple of loan originators that they can recommend. They’ve closed deals together before and the client has been happy. (I won’t get into the discussion on in-house lenders…maybe we can leave that for another day. Please?). But I will say beware the Realtor who says “I can do your loan for you!” Run I say…run! Can you say, master in one trade, expert at none?
- Your CPA: in the thousands upon thousands of tax returns they file for clients each year, certainly they must know a lender or two. But again, beware the CPA who says “I can do your loan for you!”
- Your Stock broker: for obvious reasons they should know someone who can gather appropriate financing for you. If you don’t have a stock broker, ask the wealthiest person you know to refer one to you. They’re a stock broker because they’re good with money and certainly their loan professional is good with it too.
- Your happy-go-lucky married friend: ask them who they used to finance their home purchase. If they were pleased with the service, they’ll refer someone to you without hesitation. If they’re facing foreclosure and they’re not so happy-go-lucky anymore, the service wasn’t so great and you probably can do without the referral!
I won’t recommend family…for some reason I’ve seen family screw grandma for a dollar and that just isn’t nice! But of course, if you’re in good hands, then you’re in good hands.
Now that you have some referrals, next comes the honeymoon phase. This is where you get to know each advisor and ask thought provoking questions about your particular scenario. But be careful, don’t “rate shop” for that is an act in futility; the below referenced quote will address why. What you’ll get instead is lender after lender beating each other up until one has offered the so-called lowest rate or has baited you with an ill-fated promise of the lowest rate on a 30-year fixed, no pre-payment penalty. You’ll come crawling back saying “but he said…” and that would just be an unpleasant sight. On the other hand, if they have a what (a solution) and can demonstrate why, then this evidences knowledge beyond taking an application; this is what you’re looking for. And sometimes you’ll find it irrespective of designations.
Just remember, keep you instincts close and,
As much as possible, deal only with good and honorable people. If you deal with good people, you won’t need a contract, and if you are dealing with bad people, no contract can protect you.
Adam M. Aron
Chairman and CEO of Vail Resorts, Inc.
Now if your BS detector is on and each of them talks to you in the smooth talking lingo that salesmen are taught, you can always contact me.
Mortgage originators do not have a true fiduciary responsibility to the borrower. The relationship is transactional, not one based on ongoing advise built upon a thorough understanding of the client and financial world.
I’m a former CFP, I know the difference. In fact, one of my client disclosures clearly states that I am not acting as a fiduciary. This in spite of the fact I am very capable of doing so.
This does not relieve me of my responsibility to make appropriate product recommendations and doing the “right” things with regard to the client. However, it is not a fiduciary relationship.
I do agree with the assessment of not putting too much stock into designations and presentation glitz. Nor does the size of the lending institution really matter. What really matters and what it all boils down to are the people you work with. A business relationship and satisfaction with any company boils down to the people you ultimately work with.
Thank you for suggesting to get a recommendation from your Realtor. I can’t tell you the number of times I have tried to recommend lenders to clients who want to use family or a friend or whomever is offering the “best rate.” When times get tough at closing, it is almost always too late to change lenders.
Also, I recommend to my clients to talk to three lenders, at least one of which is a bank and at least one of which is a broker. If you talk to more than one, your bs detector gets ratcheted up a notch.
Great comment Straight Digs. You took the words right out of my mouth.
Ricardo,
Excellent job with this one. I do carry the CMPS designation and enjoyed the training, but it only goes so far. The real proof, as you stated, is “in the pudding” and I say that a lot. I tell people to not take my word for it and do their research to find the right professional out there as many do not carry designations, but are still worthy of your business. Again, well stated.