Mortgage Shopping, #2

October 27th, 2009

Is there a free lunch, or isn’t there? My last post about mortgage shopping suggested that interest rates are only a slight bit different (1/8%) from lender to lender, and that the consumer needs to focus on performance, customer service and execution more than price. But no one does, do they? And we create our own customer service problems by seeking the lowest price, and expecting the best service. It happens with mortgages, movers, furniture, contractors…you name it. We have been creating our own service and product hassles since the dawn of time.

And the reason I have chosen to write about this again is a recent client who asked me to serve a piping hot free lunch. How you ask? Read on…

These were the same clients who I was introduced to in 2003 when they bought a new house and ended up using another lender, they said the lender did a poor job, and was unable to get them qualified for as high a loan amount as he said he could. I was more accurate in what I told them they could qualify for, which is why they want to another lender who over-promised on what loan amount he could get, and also offered a lower rate. Hmmm…

In 2004 they wanted to refinance, I quoted a rate, and they of course found a better deal. If you look hard enough you can always find a better deal. One month into their refinance transaction with this other lender they told me that they were not having luck with the lender, that he had been flaky, and was not returning most calls, and they were worried if their transaction would even close. Hmmm…

Then when they got their settlement documents the loan was not what was discussed originally. Hmmm….

The lender then was not returning any calls, and they wanted to shift their business to me. As I took steps to start their loan application, they called back and said the lender finally called back and said he was sorry and had some family problems. And they wanted to give him a chance again! You might wonder how I maintained my professionalism at this point, but I did. I wished them luck.

Fast forward to 2009 and they are buying a new house, the house of their dreams in which they will spend a long time, maybe forever. This is a big deal. For the several weeks prior to signing a contract on their new home, they would call and email me on the weekend, late at night, and early in the morning. And every time I would perform and execute flawlessly, and answer questions, crunch numbers, prepare a Good Faith Estimate, prepare a Pre-Approval letter for their offer, etc. They said they loved me and they were excited to work with me on this deal. Once we were ready to proceed, I quoted a very attractive rate for a Jumbo mortgage, but they called the 800# of the lender that held their current mortgage, and got quoted 1/8% lower rate than I was offering. Hmmm…of course they did.

Now let’s stop the story. What would you do? What do you think about these people? Are they creating their own problems, again? Have they done this before, and has it gotten them into trouble before? I won’t tell you how the story ends, you create your own ending, just like in the Soprano’s!

But I think this clearly illustrates the trouble people get themselves in when they ONLY SHOP PRICE in determining their mortgage lender. STOP IT! Think about the horror stories you hear about buying a certain good or service, want to know why those horror stories happen? It’s because the providers of that service or the seller of that product are trying to cut corners and compete on price, so the service and/or product quality suffers. That is it, period, there is no other answer.

So when you call some movers to move you into your new house, after shopping all over the internet for your mortgage and suffering a delay in settlement and paying closing costs that were not what you expected; and you hear someone can move you for $1,800 when everyone else was quoting around $2,300…stop. Think, and realize your move will be a nightmare if you use the movers at $1,800. It is a certainty.

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.

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