Real Bad Advice Radio Advertisement
Today I listened to a radio ad that I want to address. It truly is Real Bad Advice On A Radio Advertisement, a Real Bad Advice Radio Advertisement.
The ad invites you to use the mortgage lender buying the ad instead of using one referred by the real estate agent. It touts strengths of the advertising as being impeccable and superior. It suggests a better interest rate as a possibility.
I was in the mortgage side of the business for much of my career. I went from loan officer for a bank, to being licensed with other banks and mortgage companies. I ended this side of the business as owner and CEO of one of Washington States, largest volume mortgage companies.
The advice was bad advice for two important reasons.
1- shopping rates is a suckers game. Interest rates fluctuate at least daily and several times a day in certain market conditions. You do not lock your rate on a shopping call. The first bank I worked for ran a Sunday ad quoting their rate. They had to have the quote in on Wednesday before. People started ringing the phone on Monday AM and it was a nightmare. The rate in the paper was no longer valid. I hated it and refused to play the game.
2- This is an extremely important reason that it was Real Bad Advice On A Radio Advertisement. When you speak with a lender or loan officer that runs radio ads the relationship is between you and that loan officer. It’s a one on one relationship. If they mess you up, don’t deliver as promised they lose you.
The ad was asking you to discard the loan officer referred by your lender. Think about it. If this referred loan officer messes you up he or she puts a steady flow of referrals at risk. Their responsibility is to more than you. The loan officer receiving referrals from an agent that can provide a lot of business will go overboard, even in busy times to not mess you up.
Now having been there and even overseeing hundreds of loan officers I have seen a lot, may be even seen it all. Crashes with peoples loans happen. In busy times lenders can get too busy. They have no control how much business comes through the door each day. They have a fixed number of staff and the loan officer only has so many hours a day, even if working long hours. You definitely want to be the preferred, real estate agent referred client.
Some examples of crashes: they forget to ask for all the documents that are needed, they are slow in ordering your appraisal, the rate they promised just went away because they were slow to lock it, there are many as it is a business with a lot of detail.
The worse one I remember was with now defunct Washington Mutual Savings and Loans. An agent brought a client to me with the statement that I was competing against WAMU. The buyer had the rate quote in writing and all I had to do was beat it and I would have the loan. In checking things out I said that there was no way that rate was possible, it was way too far under the market. FYI rates from lender to lender vary very little. I not only didn’t get the loan against what I believed was a fake rate I made the agent angry. A few weeks later the agent and client came to me for help. It was time to close and the rate was way way way higher than quoted. This was a not too uncommon of a problem back then and the government has made it more difficult to have this severe of a problem, but it can happen. I still had an angry agent friend but there was little that I could do to help at this point.
A more typical problem these days is when a local real estate Principle Broker had a transaction that couldn’t close at the last minute due to a lender saying the buyer qualified for the loan and at the last minute the loan was denied. His words, “all too often the loan officer says they qualify when the app is taken, yes they qualify throughout the process, and at the last minute, sorry they don’t qualify”.
These are only a couple of examples. It truly is Real Bad Advice On A Radio Advertisement to move people from an agent referred lender to one that advertises for your business. Even if you are getting a refinance, either use the lender that you had a successful experience with or call a real estate agent for a referral. In the later case make sure the loan officer is aware of how they referred.
This advice also applies to responding to web site lenders. I have had situations where I had to warn internet found lenders that if they weren’t going to honor the commitment they made that I will help their upset client make a complaint to the State Attorney General. It’s a sad way to get action. More often than not the issue is not meeting a closing deadline. I hate to add to my list of no no lenders local savings and loans and banks. I tell my clients that I have had and seen so many bad experiences with them that I may not want to be their agent. It for similar reasons of the problems with internet lenders with one unique one, in that with some of these you get to talk to a different bank employee all throughout the process and trust me that is really not good.
There are two lenders on this site you can count on. But more importantly, if you are buying a home, use the lender agent refers you to. You will be the priority client and that is what you deserve.
Ignore this: Real Bad Advice Radio Advertisement.