Be Wary of Unscrupulous California Home Lenders
Logan Landers says: Be wary of unscrupulous
California home lenders.
“Some
California home lenders will try and make their entire month on a loan,
by making 2.5 or 3 or 4 points. The customer will figure out eventually
that they have been screwed, and that means no referrals.”
What should a borrower be wary of when shopping for a home loan?
Unscrupulous mortgage brokers. People who overcharge borrowers in terms of rate and points. They make a lot of points on a loan, and they steer the borrower toward a product designed to make them a lot of money and that may not be in the best interest of the borrower.
Can you give me a couple of specific examples that you know of?
I would say open the yellow pages and make a phone call.
(Laughter.)
And that's your specific example.
The point of a mortgage broker, the true advantage, is that we have relationships with somewhere around a hundred banks. If a borrower comes to us, we analyze the borrower's needs, look at his credit, look at his employment, whether it's a purchase or refinance, and look at the land value. There are about seven things that we look at. Our job is to find the best loan product for that borrower while making a fair profit on it.
That's what a broker is designed to do, and that's why brokers exist, and that should be their function. That's why we have a competitive advantage. We do business with dozens and dozens of banks. If you walk into the Bank of the West downstairs in this building and say, "I need a loan for my house in Studio City, I wanna buy this house," they are going to say, "Here are our loan products, here are the three (or whatever) loan products that we do." And if you don't fit in that box, you're out of luck. They will show you out.
If you come to a broker, they would look at Bank of the West, maybe. Or they may look at Bank of America, or Wells Fargo, or any one of a dozen mortgage banks that you've never heard of, and find the best loan for you, without trying to make their entire month on a single loan. What happens is brokers, typically, will become mini-bankers themselves. Such a company will fund their own loans, and thus offer only their own product rather than actually brokering the loans. That's one problem you run across all the time, because they make more money that way.
Michelle Collucci, receptionist, at California Mortgage Home Loan Brokers.
Or they will try and make their entire month on a loan, by making 2.5
or 3 or 4 points on a transaction, and not understand that a customer
has a lifetime value. Because the customer will figure out eventually
that they have been screwed in the transaction. That means no referrals.
That means the next time that customer needs a loan transaction, they
aren't coming to you. Maybe that broker made $25,000 on the deal,
but our value, our true value, is that we look at the customer
as a customer for life. We are going to do business with that customer
every time they do a loan transaction. That means we want to treat them
fairly.
We want to make a profit because we're not here to go broke. What we want to say is, "This guy is going to do five loan transactions over the next 15 years. And we want to do every one of them. That guy is worth way more than a $20,000 knock on one loan. We think he's worth $10,000 five times. And we also think he's worth two or three referrals." We expect to keep that customer for life. We are a referral-based company, and we treat our people fairly. We make them understand that sometimes a transaction has problems in it. The way we shop the loans, we are looking after their best interests. Ninety percent of the time, they recognize that we are keeping their best interests in mind.
California Mortgage Home Loan Brokers,
a Los Angeles mortgage company
Attn: Michael McKown
16027 Ventura Blvd. Suite #500
Encino, CA 91436
818-841-0051 Local
888-632-9939 Toll Free
E-mail to Michael