What are the warning signs of a shady mortgage provider?

Asked by Trulia Denver, Denver, CO Thu Apr 25, 2013

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Kawain Payne, Agent, Seal Beach, CA
Tue Apr 30, 2013
Good question

Here we go:

1. Loan terms that sound too good to be true

2. Lack of communication

3. Pre Approval letters not printed on letter head

4. Company has more than one name they use to conduct business

5. Office may be sub leased from some other type of business

6. does not provide clear cost associated with loan in writing

Kawain Payne, Realtor
0 votes
Robert McGui…, Agent, Denver, CO
Thu Apr 25, 2013
Trulia Denver,

These are my top 5.. 1. Poor communications skills. If they don't answer their phone or respond by email in a reasonable amount of time. 2. They push a particular program without considering the clients needs. 3. They have no positive references for you to check. 4. Their familiarity and knowledge of basic and niche mortgage programs is weak. 5. They are willing to suggest and do the things that are known get buyers in trouble and or put the agents license in jeopardy.

Robert McGuire
Your Castle Realestate
0 votes
Chris Yedo, Agent, Aurora, CO
Thu Apr 25, 2013
Lets answer that the opposite way. A good lender should know their business, have good communication skills and be able to explain everything to you, so that YOU understand it. I would not settle for anything less. As an agent, I can usually tell when we have a problem, because the lender quits communicating, and starts hiding, as they don't want to answer the hard questions. I would suggest getting a recommendation from a friend, or a Realtor for a reputable lender. Realtors work with lenders everyday, and usually have a few that they can suggest based on your situation. Call me, and I will recommend one.
0 votes
Julie Montgo…, , 80238
Thu Apr 25, 2013
Someone who is breathing ... just joking, sort of. Seriously, there are SO many bad lenders out there it's terrifying, and the "big banks" are the worst offenders. The best advice I can give you is work with a local bank (small local banks who portfolios there own loans like FirstBank in Denver) or a local mortgage lender that has 100% control over their processes. That means they underwrite (approve) their loans in house; they have their own appraisal management companies, and they fund at least 24 hours before closing. If your deal is ever going to fall (once past inspection and appraisal) it will happen a day or two before or ON the day of closing. Oops ... the money's not there -- and this happens more often that you would believe. That means you lose the house and your earnest money. So, stay away from all the big banks (Wells Fargo, Bank of America, etc.) and find a good local lender. Don't fall for the lowest rates -- lower than average rates means you are likely paying a fortune in points (closing costs), which many of these people never disclose. Finally, hire a professional, experienced buyer's agent who can help protect your best interests, including someone who understands loans and how the "game is played." Julie Montgomery, Elite Denver Home Sales, LLC, Greenwood Village, CO. http://www.jmontgomery.com
0 votes
Jeff Gadd, Agent, Denver, CO
Thu Apr 25, 2013
unprofessionalism, failure to get you a good faith estimate, most likely a lesser known company. There are many factors. If you have questions or would like a referral to lenders I trust, please call me- 720-231-2509
0 votes
Ray Williams, , Denver, CO
Thu Apr 25, 2013
That is a vague and broad question to answer. With all the regulations and licensing in place, I would be curious to know more specifics? The disclosures require zero tolerance for certain fees, 10% tolerance for others, and things like escrows, pre-paid interest, HOA dues are not something a lender can control. If the zero or 10% tolerance fees are out of line, the lender covers them.

My opinions are it comes to full disclosure. I fully disclose fees they will see on the settlement statement at closing. I know some mortgage lenders like to omit things like upfront HOA dues, show inaccurate escrow estimations, and the like.

Now if you are talking about saying you can helpa client, and not knowing underwriting guidelines, that is just being unprofessional. If you are talking about giving false impressions about the fact that underwriters want to certify a consumber can repay debt before approving a mortgage, that is unprofessional. If you are talking about not handling a real estate contract with communication and efficiency, again that is just unprofessional.

So again, with a broad stroke it is hard to answer a question like this~

Ray Williams
Branch Manager
Summit Mortgage Denver
Denver's 203K Lender
0 votes
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