Most buyers will need a loan officer, but very few buyers realize how critical it is to chose the right loan officer. There are a number of decisions in life that have major implications, and too often we don’t realize how important a decision is unless and until we experience a nightmare scenario. I’ve heard so many horrendous stories from clients about how they got burned by hiring the wrong loan officer that I finally realized that buyers need to know how to find a great loan officer.
The Loan Officer Conundrum
If you spend any time reading my articles on this Sequim Real Estate Blog, you’ll know that one of my passions is protecting consumers, especially my clients. What am I trying to protect my clients from? The dishonest and the incompetent. I realize I’m probably singing to the choir here, because by the time you get to retirement, you know all about the dishonest and the incompetent in the real world. The challenge for buyers is not getting caught by one of these people when purchasing a home.
“Ah,” you say, “what could possibly go wrong by just calling any loan officer? Aren’t they all the same?” So glad you ask.
An elderly widow refinances her home, and unbeknownst to her, her loan officer charges a loan fee of $18,000, instead of the normal $2,000. The loan officer is never held accountable. A retired couple with nearly perfect credit apply for a loan to buy their dream home and because their loan officer made some mistakes due to lack of experience, the underwriter refuses to approve the loan at the 11th hour. The home never closes as Fannie Mae refuses to extend closing. What a disappointment!
The Wrong Loan Officer
A young couple are excited about buying their first home, and they receive a pre-approval letter from their loan officer. They are told their loan is fine and they will be able to close. My clients are happy. I’m happy. Everyone is happy. Just before closing their loan officer tells their Realtor (that would be me) that their loan will not be funded, because some applications they submitted for additional credit cards in the last few days reduced their credit score, which made them ineligible for a loan. They received poor advice from their loan officer.
A couple in their early 60’s are fulfilling a life long dream of retiring. They don’t know there’s a difference between a bank mortgage department, a mortgage broker, and a mortgage banker, so they just hire a loan officer at a bank. They assumed all loan officers are the same and that they all had access to the same loan programs. Their loan officer gets them in a loan that costs them a lot more than the right loan would have. They only learn later, like a year after closing. There’s no remedy for them. All they can do is look at each other and say, “Live and learn.”
Do I have your attention now? Or as the Verizon commercial says, “Can you hear me now?” You don’t have to “live and learn” or attend the school of hard knocks yourself on the subject of finding a loan officer. I will give you the experience of hundreds of clients and 37 years of being in the real estate business, and I’ll do it right here at absolutely no cost to you. [You’re welcome.]
Loan Officer Qualifications
Notice that I’m not talking here about outright mortgage fraud. I’m talking about basic honesty and professional competency. If everyone was both honest and competent, you and I would never have to worry, and lawyers would be out of business. I’m not in the mortgage business, but I’ve been helping guide clients through the labyrinthian mortgage world by connecting them with the best in the mortgage business for decades, and I’ve spent time interviewing the best in the business for this series.
This subject is much bigger than one 743 word article, so this is the introduction, making you aware of the importance of finding and hiring the right loan officer. I will follow up this article with a short series that will explain in plain language how you can differentiate loan officers, and what to look for to protect yourself and get the best loan at the best rates. I will even provide a short list of questions you can ask a loan officer when you interview him or her, and I’ll provide you with a cheat sheet with good answers and poor answers.