Be Wary of Unscrupulous California Home Lenders
Be Wary of Unscrupulous California Home Lenders Even though the number of home loan brokers in this state has shrunk since the real estate crash, there are still many that operate boiler rooms. Doing business with someone new to the business is a very high-risk proposition. If you get unsolicited mortgage offers by phone, they are coming from "boiler rooms." We asked a California home lender we know what a borrower should be wary of: "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. "Some California home lenders will try to 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. 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." That is pure honesty. |
