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Using the builder's "preferred lender" (Lennar included) is alot of what caused the bubble and burst. I'm in lending in San Antonio (I wasn't during the boom) and I'm seeing incredibly irresponsible loans that were made to people who had absolutely no business qualifying for anything, let alone a home. Their loans were bundled up and sold with good, prime loans. It's criminal what happened, in my opinion. I would NEVER go with the builder's preferred lender and my bank won't be part of any of that.
Using the builder's "preferred lender" (Lennar included) is alot of what caused the bubble and burst. I'm in lending in San Antonio (I wasn't during the boom) and I'm seeing incredibly irresponsible loans that were made to people who had absolutely no business qualifying for anything, let alone a home. Their loans were bundled up and sold with good, prime loans. It's criminal what happened, in my opinion. I would NEVER go with the builder's preferred lender and my bank won't be part of any of that.
I would agree with you regarding predatory lending, but that's not the case as we're selling a home to buy one as the LTV is low.
Using the builder's "preferred lender" (Lennar included) is alot of what caused the bubble and burst. I'm in lending in San Antonio (I wasn't during the boom) and I'm seeing incredibly irresponsible loans that were made to people who had absolutely no business qualifying for anything, let alone a home. Their loans were bundled up and sold with good, prime loans. It's criminal what happened, in my opinion. I would NEVER go with the builder's preferred lender and my bank won't be part of any of that.
Putting the bulk of irresponsible loans on builder mortgage companies is not even a stretch, it's flat out not true. I do believe many of the companies that were mischief makers are the ones that packed their backs and left town and/or went under. Some were builder companies, some were banks and some were brokers. A whole lot of a lot was spread around and shared by all. But somehow, you've conveniently substituted builder mortgage companies for the true culprits, the big boxes and the security traders trading worthless paper. And you are missing the Dodd-Frank legislation which makes sure the practices of the last minute surprises will never occur again, without severe penalties, for the institution, and quite possibility, the individual.
OP (the rest of this post is addressed to you), in my side of banking, when Dodd-Frank became our reality in 2010, those that remained in the industry now have regulations that have a choke-hold on the industry. I don't disagree that changes were needed, but when the Federal Government makes changes without practicality, you get chaos. We now have a Good Faith Estimate that doesn't tell the borrower how much cash they need, nor any particulars of the contract, namely seller assistance and earnest money. But by God, those numbers better not be wrong. They took their eye off the target and got wrapped up in rules. Anyone that has been able to survive this business, knows to pick up the slack the Feds left off and we all provide a form that is the no longer called the GFE, but that's what it really is. The new GFE just stinks.
The industry now requires lenders to operate lean, if they are going to remain competitive. Profit margins have never been narrower (for mortgage companies and lenders, at least, I don't know about brokers). Where the real difference is now, is structure. Where the file is underwritten? Where is it processed? Where it is closed? Does the company have a central processing center, or are the processors and underwriters on site? Does the company send their loans out the the lender or end investor for portion of their process? Add to that mix a new construction loan that's not ready for 120 -180 days, not many are equipped to handle processing the loan twice (once up front and then pre-close) and coaching the buyers during the process. (Not to mention the new construction loan docs, which fortunately, you do not have).
I do not work for a builder, but a portfolio bank. In my metro area, I am an approved outside lender with major builders in my region (and I am the preferred lender for several small lenders). If there is a unique situation, their lender can't handle, I'm called in. But primarily, I do rescue transactions. I'm betting your quotes from the builder will be dead on, but don't become complacent around lock-in time. Keep them honest at that time, too. Get a couple quotes to make sure you are in the ballpark.
And finally, I'll give you my pregnant woman/expectant couple lecture, too, lol. I don't know what it is about buying a home, but everyone wants to share their horror stories with you. Just like announcing a baby is on the way........everyone starts ribbing you about the loss sleep that is about to come, among other things. Only the sharing of stories about home buying are not edged with humor. It's always emphatic what not to do's and designed to make you second guess your initial decision(s). Be very careful who you select to react to.....your usual "button pushers" will be active in your seems-like-this-process-will-never-end experience. Use this site as a sounding board. There's probably no less than 3 dozen professionals here to assist........but most of all, trust your gut.
We did new construction too, but with Stan Pac. They allowed us to use our own lender AND we still got their incentives, plus some! The only requirement they had was that we had to apply for a mortgage with them as well. In case our lender dropped the ball. It never happened and our lender matched the builders rate.....so needless to say we were happy!
Putting the bulk of irresponsible loans on builder mortgage companies is not even a stretch, it's flat out not true. I do believe many of the companies that were mischief makers are the ones that packed their backs and left town and/or went under. Some were builder companies, some were banks and some were brokers. A whole lot of a lot was spread around and shared by all. But somehow, you've conveniently substituted builder mortgage companies for the true culprits, the big boxes and the security traders trading worthless paper. And you are missing the Dodd-Frank legislation which makes sure the practices of the last minute surprises will never occur again, without severe penalties, for the institution, and quite possibility, the individual.
OP (the rest of this post is addressed to you), in my side of banking, when Dodd-Frank became our reality in 2010, those that remained in the industry now have regulations that have a choke-hold on the industry. I don't disagree that changes were needed, but when the Federal Government makes changes without practicality, you get chaos. We now have a Good Faith Estimate that doesn't tell the borrower how much cash they need, nor any particulars of the contract, namely seller assistance and earnest money. But by God, those numbers better not be wrong. They took their eye off the target and got wrapped up in rules. Anyone that has been able to survive this business, knows to pick up the slack the Feds left off and we all provide a form that is the no longer called the GFE, but that's what it really is. The new GFE just stinks.
The industry now requires lenders to operate lean, if they are going to remain competitive. Profit margins have never been narrower (for mortgage companies and lenders, at least, I don't know about brokers). Where the real difference is now, is structure. Where the file is underwritten? Where is it processed? Where it is closed? Does the company have a central processing center, or are the processors and underwriters on site? Does the company send their loans out the the lender or end investor for portion of their process? Add to that mix a new construction loan that's not ready for 120 -180 days, not many are equipped to handle processing the loan twice (once up front and then pre-close) and coaching the buyers during the process. (Not to mention the new construction loan docs, which fortunately, you do not have).
I do not work for a builder, but a portfolio bank. In my metro area, I am an approved outside lender with major builders in my region (and I am the preferred lender for several small lenders). If there is a unique situation, their lender can't handle, I'm called in. But primarily, I do rescue transactions. I'm betting your quotes from the builder will be dead on, but don't become complacent around lock-in time. Keep them honest at that time, too. Get a couple quotes to make sure you are in the ballpark.
And finally, I'll give you my pregnant woman/expectant couple lecture, too, lol. I don't know what it is about buying a home, but everyone wants to share their horror stories with you. Just like announcing a baby is on the way........everyone starts ribbing you about the loss sleep that is about to come, among other things. Only the sharing of stories about home buying are not edged with humor. It's always emphatic what not to do's and designed to make you second guess your initial decision(s). Be very careful who you select to react to.....your usual "button pushers" will be active in your seems-like-this-process-will-never-end experience. Use this site as a sounding board. There's probably no less than 3 dozen professionals here to assist........but most of all, trust your gut.
Thanks for all our your great info here. I do need to talk with their lender tomorrow and prob will go with them instead of my own bank as long as they can match rates and fee's. I also feel that it has the better possibility of going a little smoother.
One final thing.......I am not promising perfection from the builder mortgage company, just a better chance of that smoothness......because if your bank is one of the big boxes, or even one of the regional banks I know of, they're the equivalent of stepping into the fire.
Thanks for all our your great info here. I do need to talk with their lender tomorrow and prob will go with them instead of my own bank as long as they can match rates and fee's. I also feel that it has the better possibility of going a little smoother.
I'm in a similar situation, buying a Weiland built home in SC. Their preferred lender is WFS which is part of Wells Fargo.
One of their main incentives is that if you use WFS, you only have to put down a 2.5% deposit as opposed to the 5%. That's just a cash flow issue though since we'll eventually be putting down 20%.
I got a good faith estimate from WFS and sent it to another lender to have him compare apples/apples to see if he can match, beat or tell me it's a good deal and to go with WFS.
I'm in a similar situation, buying a Weiland built home in SC. Their preferred lender is WFS which is part of Wells Fargo.
One of their main incentives is that if you use WFS, you only have to put down a 2.5% deposit as opposed to the 5%. That's just a cash flow issue though since we'll eventually be putting down 20%.
I got a good faith estimate from WFS and sent it to another lender to have him compare apples/apples to see if he can match, beat or tell me it's a good deal and to go with WFS.
Excellent! I have found if you have an estimate from another lender to hold the builder's lender's feet to the fire, you will come out ahead.
Lennar told my sister she HAD TO USE their lender. The salesperson said she could not use a lender of her choice. We have this in writing. Her interest rate is much higher than if she had gone with another lender. I would never do business with Lennars mortgage company again or suggest anyone use them. They mislead you, get ten people involved, do not get back with you after demanding documents from you. There business acumen is horrible. I will be armed with a pre approved loan before setting foot into another neighborhood with new construction. Our experience with Lennar has been a nighmare.
I would like to see proof of the above statement about Lennar indicating she cannot use another mortgage company.
What is most likely true is that she is not eligible for some special promotions offered when one uses Lennar for the mortgage.
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