Does It Really Matter Where Your Loan Officer Is Located?

July 13th, 2017

What Who Where When How Why

It is very common for realtors to ask a homebuyer who their mortgage loan officer is and where they are located. There is a belief that a lender, and for that matter all the service providers to a real estate transaction, needs to be very local.

Realtors assign some magical powers to a mortgage loan officer who is located in their own town or city, versus one that is located somewhere else. They don’t realize that the mortgage process steps are exactly the same no matter where the lender is located. What is important is that you are working with a lender who is experienced, responsive, and well-reviewed. The experience that home buyers will receive will be the same as if the mortgage loan officer is local.

What really matters?

The real differentiator for a smooth mortgage process is the individual mortgage loan officer. It is not where that loan officer is located. I usually ask realtors that may not know me to check my reviews on Zillow, Yelp and Google​ to help ease any concerns.

This is the same concept as the discussion I previously had on where appraisers are located. Click here for more on why where the appraiser works or lives is not as important as their experience and market knowledge.

An example of highway robbery!

I had a client I had worked with for four years to get them pre-approved.  Over those years I answered frequent questions, sent numerous pre-approval letters, and sent frequent closing cost estimate worksheets. Dozens of hours went into working with them. But the listing agent in their transaction was not familiar with me and wanted their favorite lender to do the mortgage for the buyers.

The realtor went as far as saying that they would only sell the home to the buyers if they used their preferred lender instead of me. My clients found this very frustrating. But they had to agree to use the other mortgage lender they had no relationship with. And the other lender was one which they were not sure was providing them the most competitive terms.

Should one realtor mandate a choice?

Should a realtor insist that you use a “preferred mortgage lender” or else penalize you for not using their lender. You may not get the best service or the best terms.  And the realtor may be violating Section 8 of the Real Estate Settlement Procedures Act (RESPA).  Don’t let the realtor make the decision for you when searching for a lender.

Lenders can be all over the country

Some consumers are using online lenders who are seated all over the country. What if a consumer finds a lender that happens to be somewhere else other than the target market the property is located in? It does not automatically mean they can’t get the job done efficiently and economically for the consumer. More vetting may need to be done but it does not mean that the non-local lender should automatically be ruled out.

National Mortgage News in March 2017 reported that 20% of all purchase business is going to consumer direct lenders who are seated all over the country. So realtors are going to have to get more and more accustomed to dealing with out-of-state lender’s. Just vet them harder! Check reviews, ask about their experience and use your best judgment.

Experience and reviews

If a mortgage lender has two years in the business and only has a handful of reviews which are average; maybe they are not a good choice. If they have dozens or hundreds of five star reviews and are very experienced, then my guess is that’s a safe choice of mortgage loan officer. Regardless of where they are located.

Would you work with an individual loan officer in Alaska who was highly reviewed, highly experienced, offering your competitive mortgage terms for a property you are purchasing on the East Coast? Or would you prefer a local lender you know nothing about, can’t find any online reviews about, don’t know how long they have been in the business. But the realtor prefers that you work with them because they are local and the realtor knows them? Does that make sense?

Don’t choose your lender based on the realtor’s relationship with that lender.  Instead use proper business metrics, and ask a lot of questions.

A real world example

I had a pre-qualified client who was being pushed by their realtor to use a different local lender instead of me.  This was because I did not live or work in the specific county the client was buying in.  Instead, I lived just two counties from the subject property.   The client chose me and their message to me is below:

“Hey Brian,

Thank you for the quick response. I’ve passed along the information and we’ll let you know if they/us have any more questions.

It does seem like a silly thing to be worried about in the digital age. The seller must not be familiar with Google, as your name and reviews are all over the internet!

We appreciate all the help.”

I have nothing more to say. The above client’s comment says it all!

To contact me to discuss your mortgage scenario in any part of the country. Or we can talk about mortgage rates and other mortgage questions. Click here to schedule a call. Or you can email me directly.

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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