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The difference between that guy and mortgage underwriter in your bank is that the first one will get paid only if you close with him, and the second person is on paycheck and have no hidden agenda to push you...
How I know about some $$? It calls referral fee and I've been there, so I know exactly what I am talking about.
Bank and credit union can give bonus to their LO, the LO and also get FIRED for not producing, it is not a hidden agenda, no body wants to work for free, no matter how much consumers what that. It is all about big companies making it look like they have employees working for free. I don't know when you were getting or paying referral fees, was is recent, were you a licensed real estate agent or were you on the lending side paying referral fees before, it use to be legal. Real estate agent can still get referral fees from each other legally, does it make it morally or ethically wrong?
Don't worry where your loan ends up, you don't have any control over it. It can be sold to anyone including a big bank which you didn't want to deal with.
If you are not in touch with technology and you want more service you might need a loan office that makes house calls.
If the LO doesn't take time to ask about your situation, they are just a paper gatherer and will give it to someone else then they act as a middleman just to pass you request for more documents.
If the LO doesn't care to understand your goals and just wants you to go with this loan or that loan, without explaining it , find another LO.
There are a bunch of loan products out there, bank and credit unions are limited to there products, they may or may not fit your needs. It is important to find an experience LO or a company that has been around enough to have experience people to close the loan or know up coming pitfalls
"I work for a small community bank, where we do our own processing, underwriting, closing and funding - all under one roof."
I wish I had gone with a small community bank, but ended up with a mortgage broker, who is, I now believe, just stringing us along. She has made various promises, including a written one that our loan would be done with underwriting by the 18, which is Monday. Guess what - no loan info yet.
If I ever do this again, I will make sure that I go with a all in one shop and keep on them every single day about the loan.
My advise is to research whomever you are going to go with on your loan. I used to believe brokers were best but now, with this experience, I'm not so sure. I do now I wouldn't go with the big banks, BOA, WF, etc.
How I know about some $$? It calls referral fee and I've been there, so I know exactly what I am talking about.
You demonstrate YET AGAIN, that you do not in fact, know what you are talking about. Here's a statement from the federal government's HUD page;
Quote:
Prohibited Fees. It is illegal under RESPA for anyone to pay or receive a fee, kickback or anything of value because they agree to refer settlement service business to a particular person or organization. For example, your mortgage lender may not pay your real estate broker $250 for referring you to the lender. It is also illegal for anyone to accept a fee or part of a fee for services if that person has not actually performed settlement services for the fee. For example, a lender may not add to a third party's fee, such as an appraisal fee, and keep the difference.
As that page spells out, it would be a criminal act to either pay or receive the "referral" fee about which you are blabbering. While three may be some tiny subset of licensees who engage in criminal behavior like that, it's certainly not common in the industry as you'd like people to believe.
"I work for a small community bank, where we do our own processing, underwriting, closing and funding - all under one roof."
I wish I had gone with a small community bank, but ended up with a mortgage broker, who is, I now believe, just stringing us along. She has made various promises, including a written one that our loan would be done with underwriting by the 18, which is Monday. Guess what - no loan info yet.
If I ever do this again, I will make sure that I go with a all in one shop and keep on them every single day about the loan.
My advise is to research whomever you are going to go with on your loan. I used to believe brokers were best but now, with this experience, I'm not so sure. I do now I wouldn't go with the big banks, BOA, WF, etc.
Was this a broker referred to you by your agent? You'll have good and bad brokers no reason they'd all be good
How I know about some $$? It calls referral fee and I've been there, so I know exactly what I am talking about.
Mortgage brokers do not give referral fees to RE agents. Those that do will soon be out of business or in jail. It violates federal RESPA laws. "RESPA provides that, "No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person." 6 Most loans are "federally related" because that includes not only loans made by federally insured lenders (almost all banks are insured by the FDIC), but also loans intended to be sold to a federal institution such as Freddie Mac or Fannie Mae.
This prohibition applies to both licensees and laypersons. Realtors® are not exempt. RESPA prohibits either giving or receiving any consideration or thing of value pursuant to any agreement or understanding that it is in exchange for referral of business relating to a real estate settlement.
When I worked as an agent I referred clients to several mortgage brokers that got the job done. Some of these loan originators worked independently. Some worked for banks. I just cared that they treated my clients well and did the work to get them a mortgage.
So on the topic of brokers, here is how my process went in April.
Jan: Contacted a real estate agent that is a close friends mother. Inquired with general questions much like OP is. Had about 7k saved up. Mind you we have been looking at houses for years in our area, mostly drooling but also getting a feel for our area.
Feb: Got bonus and tax return so up to 10k. Started looking at houses with Agent. Contacted Wells Fargo and got a soft quote, they wouldnt put anything in writing until we had the full downpayment- which irked me because I was banking on having seller pay part of the closing costs. WF apparently doesnt consider this. Real estate agent put us in contact with a close friend who is a broker. Broker gave us a pre approval and worked around the fact that we would be trying to get seller to assist with closing costs. Also worked around the fact that we would have more cash in the form of saved paychecks by closing.
Mar: Found house we wanted. Made offer. Repairs needed to be made per inspector. All this took a few weeks.
Apr: Had full downpayment of 13k. Closed on house. Love it.
No problems with Agent or broker. Smooth process. If someone got a kickback I never knew about it or felt it.
Please, don't use the person your agent referred you to! It's not in your best interest: 1) your agent will know your possibilities (money wise) and will be considering it and 2) your agent will get some $$ from that guy.
The best thing to do is to go to your bank and ask for preapproval. If you have a checking account there it will simplify a lot of things for you. Also check local credit unions.
Wow, talk about spewing incorrect information. Besides all the legal ramifications that have been share.... I(and a lot of realtors I know) typically refer several mortgage companies (if we are asked) because we know that they will do what they say they will do and don't screw things up at the last minute by failing to get approval or ask for more fees, etc. The last thing agents want is some mortgage company failing at the last minute.
Just recently I had a client that insisted on using a particular lender that he had found on the internet. I told him I was uncomfortable with them because of online reviews, but he wanted to stick with them. Fast forward to closing.. one of the loan officers had screwed up the numbers for taxes escrow and he didn't meet their ratios they needed and ended up having to pay $5000 at closing in order to qualify or he wouldn't get the loan. It was a nightmare. But I can guarantee that if he was using one of the lenders that I had referred that would not have happened.
How will I know if this guy knows what he's doing?
This thread went sideways pretty quickly.
Anyways, ask how much you need for a down payment and what are your options, report back here what he/she says.
Do give out your SSN to new creditors , it may hurt your credit score, this includes cell phone companies, retail store credit cards, applying for a Macy's card to save 15%. You'll have some explaining to do if you deposit money other than you paycheck into your bank accounts. Carrying an AMEX with a balance will cause problems.
You said you did this over 10 years ago , do you still have the house, bring your insurance declaration page, is it rented out , will it be rented out , bring the lease. Was/Will it be sold, bring the Final HUD1 / Sales Contract/ Estimated HUD.
Makes copies of your earnest money deposit check.
Will there be any gift money , insurance money , money from somewhere else, save copies of them before you deposit it.
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