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Like most
businesses,
there are people
who excel and do a really job good and then there are those
who give the
business a bad
name. The
mortgage business
has experienced
record low rates
over last
several years.
As a result of
the boom,
mortgage fraud
and foreclosures
are also at record
highs in many
places because
of the
inexperienced
amateurs and
criminals who have entered the "hot business." I believe that getting a mortgage license should be as tough as passing the Bar Exam, but unfortunately it's very easy. Today, inexperienced loan officers are in much greater number (I would say about 20 to 1) than are the real loan officers and are
putting people
in the wrong
loans and giving horrible advice. They are very tough to spot for the average customer because most have exceptional selling skills. You must look beyond how they present themselves and see what they actually know about helping you. Here are some things you can do:
The # 1 way
… Call me and
I’ll be your
loan officer (I
had to say it)-(Contact
me here)
Ask your loan
officer the
following
question:
What determines
conventional
mortgage rates?
Or what most
directly influences mortgage
interest rates?
There are 3
possible
responses:
1)
Mortgage-backed
securities or
mortgage bonds.
This is the only
correct answer.
If you get this
answer, you are
likely dealing
with someone
knowledgeable
although you
might try some
more questions.
2) I
don’t know but
I’ll find out
for you. This answer is OK. You are
probably dealing
with a new or
less experienced
loan officer,
but they are an honest one. That’s
assuming they
return with the
correct answer.
3) The Federal
Reserve, my
manager, or any
other answer. These are all
wrong and you
should run. If they say the market determines rates, ask for a more specific explanation. A good salesperson will tip-toe around the question very well by saying things like "it's the market" whereas a real loan officer will either answer it, or get the answer.
Other test
questions could
include:
(anyone awake in
mortgage class
should know
these)
Q: What
does RESPA
stand for?
A: Real
Estate
Settlement
Procedures Act.
Q: What
is the “margin”
on an adjustable
rate mortgage?
A: It is
the difference
between your
index and the
interest rate.
Q: What
type of mortgage
loan is most
commonly tied to
the prime rate?
A: Home
equity lines of
credit. (HELOC)
Another great trick is to visit
any job search
website like
careerbuilder.com,
monster.com, or
hotjobs.com.
Simply do a
search for a
loan officer
position as if
you are looking
for the job.
You should see
most of the big
name companies
in your city pop
up with their
“now hiring”
ads. Under job
requirements you
will see that
most do not
require any
college, any
previous
experience, but
sales experience
is always required.
These companies
want to put
aggressive young
salespeople
through a short
training course
so they have
just enough
knowledge to
push the high
commission loan
products.
These are the
places to avoid.
Most of the
loan officers at
these companies
are very
inexperienced,
and have financial problems themselves.
Perhaps the biggest sign of a bad loan officer is they
start
advertising a
great rate or
payment plan
before
speaking with
you about your
finances. It is
impossible to
know if any loan
is a good deal
without knowing
things like:
how long you
intend to stay
in your home,
how much income
are we working
with, or if you
have other debts
we should deal
with. No one
has a monopoly
on the best rate
or payment.
Since we know
that mortgage
backed
securities
determine rates,
anyone with
access to linked
products have
the best rates
available. I
have access to
all the
so-called great
programs too,
but we must find
out which one is
the best fit.
Therefore, if
you ever deal
with someone
talking about
how great their
rates are or
quoting you
super low
payments early
on then ask,
“What actually
determines
conventional
mortgage rates,
and how are
yours better?”
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