I wanted to post this as there have been a few threads about loan officers/loan terms here and in the mortgage forum. Everyone is aware of the problems in the mortgage industry and financial markets. There were and are a lot of people giving bad advice and not acting in their clients best interests.
Make sure that you ask questions of your loan officer when you go to get a loan. More than just what rate can I get or how much it will cost. You need to look for honesty and value, not glossy answers. After all, a good faith estimate is just that.... an estimate. Anyone raise the fees and/or rate anytime before closing. They can also offer good rates BUT at a price, such as an adjustable rate or pre-payment penalties. Do not be fooled by numbers alone, find out what you will get in return for those fees.
The purchase or refinance of a home is a huge investment, would you trust a doctor or attorney becuase they had a $195 special this weekend? Or would you find out if they were licensed, educated professionals that could provide the service they were offering? You need to be informed and ask questions.
1) Are they properly licensed and educated? In North Carolina,
ALL mortgage brokers and lenders
MUST be licensed by the NC Commissioner of Banks. You can search license information online at
https://www.nccob.org/online/LicenseSearch.aspx Some loan officers are unlicensed as they could not meet the testing, background or credit investigations or lost their license.
Do not work with any unlicensed loan officer!
You can search by both name and company. Loan officers at banks are not required to have
ANY education or licensing so they will not be in the system (big loophole, dont you think?). This will hopefully change with new federal regulations, but right now bank lobbyists have managed to keep their loan officers from having to meet state oversight. It is possible (and I have seen it) for loan officers to jump to a bank if they lose their license or can not meet the requirements to become licensed.
2) Are they memebers of any of the state or federal industry organizations? This is one difference between professionals and those that are in this for the money or as a hobby. There are many part-time loan officers and people who jumped in over the last few years to make "easy money".
Ask them how many years they have on the job, how many clients they work with, what their educational background and experience is. There is very little requirement for loan officers, just a high school education, an initial multiple choice exam and an 8 hour/year course. Some loan officers can not answer what an annual percentage rate is or how adjustable rate mortgages work, so how are they expected to inform their clients?
3) Are they honest and earn your trust? When you ask questions, do they say "don't worry about it, its not important, lets skip that" or fumble for an answer? Work only with those that treat you as a valued customer and are willing to answer your questions in a clear and satisfactory manner.
Loan officers
should be financial consultants, the same as your CPA, financial planner or tax preparer. They
should not be slick salespeople trying to impress you with bells and whistles as if this were any other product. A mortgage is
NOT a product, its a serious financial debt and tool that can leverage your buying power and build financial security for your family, or create financial ruin.
Its your financial future and possibly the biggest investment you will make. Do not trust it to someone unless they are qualified professionals. Hopefully the next few years will weed out some of the bad players, but be informed and always do your homework.
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