By Nobu Hata
With the down market and the inevitable mass exodus of “those” loan officers, you’d think we could rest easy knowing that the loan officers left would be – for lack of a better word – decent.
Holy Hannah, would we be wrong.
In the last couple weeks, I’ve had various buyers shop their loan around, including those using FHA. What I thought were set guidelines and fees isn’t what it seems. One particular buyer of mine asked for Good Faith Estimates based on the same home, price and mock closing date, from each of the loan officers he’d met with who’d pulled his credit, on my recommendation. Lo and behold, one origination fee was $1,100 more than the other. The rest of the meeting was an eye-opening study of mortgage v. mortgage.
Now, I’m not going to get into specifics of big bank versus broker, nor the merits and drawbacks of each. But what I will say is that there’s no better time to brush up on the new GFEs and fees associated with them. Fees and guidelines for all types of loan products are changing at a lightning pace, and while it’s largely up to our clients to perform their due diligence, it’s up to us to impart some insight.
So if you’re unfamiliar with a bank, or its products, ask! Get to know the fee structure of your fallback bank and create an open relationship with a trustworthy loan officer to keep you abreast of changes. Don’t forget about YOUR broker fees as well! There’s nothing I hate more than hearing of an agent’s “Broker Admin Fee HUD omission at closing” horror story. I’ve been getting into a habit of asking for year one APR rate to go along with the interest rate; that’s what the new HUDs are based on, right? Then and only then can you get a real idea of what the true impact of the fees really are. Finally: Read the GFE. Don’t take for granted that the thing is broken down ad nauseum.
Don’t let the perception of an industry shakeout lead you to believe that the bad apples are gone. Think of these days as the perfect time to be a better advocate for your client.
Nobu Hata is a sales associate for Edina Realty in Minneapolis, and a founding member of the Minneapolis YPN group, the YoPros. Visit his Web site at www.nobuhata.com.