The Difference Between a California Mortgage Broker & an Institutional Bank

Fernando (left) and Shane talk at the conference table in the spacious office.

Prior page of the interview

So tell me, what is the state of the mortgage market these days?

Well, the mortgage market -- as we all know -- has tightened, extraordinarily tightened. The guidelines were so loose a few years ago that just about anybody with a name and Social Security number could get a loan. That was too extravagant, and now it's gone to the other extreme where you needed to have the perfect FICO score and the perfect income to qualify. Now it is loosening up. We have a new administration coming in.

The government is getting involved to make sure people qualify for these programs and there are a lot of programs now that, with the government's help, are getting a lot of first-time homebuyers into the market. There are also programs that the government is looking into that will help people get refinancing, as well as help people that are stuck with upside-down mortgages. "Upside down" means that they have a loan on the house that is bigger than what their house is presently worth.

In a declining real estate market, that's been happening a lot.

We are starting to see programs slowly roll out to help those people. For about six months, we were in a state of paralysis where nothing was getting done. The government didn't know whether they should step in or not, and it was hoping the market would correct itself. But the market was waiting to see if the government was going to step in and help. We have reached the point now where it looks like they are working in unison. The free market is working with the government to help home ownerships stay a reality in this country.

What can you guys do for a mortgage customer that you think you do better than anyone else that you know of?

Well, the big thing right now is there are very few mortgage brokers out there right now, and it's mainly the big banks that people are going to for their solutions. The thing is, depending on how the bank is doing that quarter, they are going to modify their guidelines accordingly. If you happen to go to a huge bank when they are not having such a great quarter or their loan production is not as good as it needs to be, they will try to fit you into a small box of parameters. They will offer you a narrow range of loans that you can qualify for.

We, being mortgage brokers, will work with all the banks, the small banks, the big banks, the huge banks…every bank you can think of. We work with them on the wholesale level. We could still offer retail rates, the same rates you get when you walk into a retail branch. We can offer you that, but more than likely better, but the best part is that we shop around. Depending on the day, depending on the week, mostly what's happening on that day, we can lock in a good rate. We can shop all the different banks to see which ones will give you the best rates and the best terms. Mainly, it's 30-year fixed right now. We are not really seeing many five-year, or 10-year adjustable mortgages.

When you are looking at the bigger loan amounts of $700,000, $800,000 and choosing an adjustable loan, it is really important to go shopping. And for an individual to go shopping at five banks, it will take you two to three weeks. You will have to drive around to all the banks and fill out applications. You'll have to turn in all the paperwork and even then you don't get the level of service that we provide. With most banks, you have to work with them during banker's hours, during regular business hours, when more than likely the clients are at work. It's not convenient and it's a waste of time.

Next page of the interview

Interviewer Michael McKown, on the phone to a customer.

California Mortgage Home Loan Brokers,
a Los Angeles mortgage company
Attn: Michael McKown
575 Elm St., Suite #18
Long Beach, CA 90802

818-845-0579 Local
888-632-9939 Toll Free

E-mail to Michael