Southern California Loan Brokerage
Horror Stories
This is an example
of a telemarketing "boiler room." Make those calls!
Southern California Loan Brokerage Horror Stories Do you like scary stories? Good, here are a couple, courtesy of the principals of Southern California loan brokerages we know. Southern California loan brokerage horror story #1: "I had a client that approached us for refinancing. She was looking for a loan fixed for the first five years. We quoted her a rate of 5.5%. She was talking to another broker who told her that she could get a rate of 3%. I explained to her that there is no "magic money," that we all get the money from the same sources, and the market rate is what we quoted her. Because we control our own margins, we can be a little more flexible than banks, so I told her that we could improve it by one-quarter or one-eighth of a point. "The other broker insisted she could get her the 3% at five years fixed. She wouldn't listen to the warnings. She went ahead and did the loan with that other broker. Well, it turns out a friend or family member reviewed the loan documentation after the closing. He explained to her that this was a negative-amortizing loan. "What was happening, in reality, is that her payment was based on the 3% rate but her actual rate was close to 7.75%. That sounds kind of confusing, so that's where the negative amortization comes in. The difference between the two payments, which was like $700 or $800 a month, gets tacked onto the balance on the back end. At the end of those five years, the loan balance is will be larger than what she started with, and at $800 per month, that's $9,000 a year. "When she found that out, she came back to us and wanted us to fix that problem. Unfortunately, by that time there was not enough equity in the house to do that refinance. Now, this is a true horror story because she didn't know what to do. Her rate was super high, she was accumulating payments, and the loan balance grew. Her future looked pretty bad. She was no longer going to be able to afford her house because a mortgage broker tricked her into believing that she was going to get a loan fixed at 3% for five years." Southern California loan brokerage horror story #2: "Big 'boiler rooms,' rooms full of people selling mortgages on the phone. It's a horrible environment where you're chained to a desk and expected to make a certain amount of phone calls in a certain amount of time. And if you don't, your name can appear on a TV monitor where everyone can see, you know, 'Bob Smith Bob Smith Bob Smith' endlessly scrolling across the TV monitor as a signal that Bob is not making phone calls. "They can't get up to get a cup of coffee. One of our guys used to work at a company whose name we would all know and recognize. It's not important who it is. If you went to the bathroom and you were gone more than 120 seconds, your supervisor would have a problem with that. "Then there are late-night sessions where people are made to dial the phone endlessly, trying to hustle those mortgages while drinking can after can of Red Bull to keep them going. You're sitting there, making phone calls, end of story. And if you don't perform, then you're gone. That's the way a large percentage of the loans in the United States are originated." That's not at all like our Southern California loan brokerage. We will not play dishonest games with you. Nor do we have a crew of mortgage slaves down in the basement making calls. If you would like to do business with our Southern California loan brokerage...you call us! We believe that is the decent and proper way to do business. |
