The old 'Bait and Switch' mortgage companies - Posted by Lori Samson

Posted by Lori Samson on May 27, 2000 at 10:53:16:

I hold near 6 million dollars in real estate (single family homes)and I can controll what happens to me (in some ways) but I have had a problem with the tenant/buyers that are getting THEIR loans. I recommend ones that I know and like but I don’t force them to use mine I just strongly recommend it or if things go wrong they then blame me because I sent them there (guess how I know that?). I just happened to have several of these bait and switch deals tear apart deals in the recent few months with my tenant/ buyers seeking financing. Sorry I mentioned this- Enough said… the bull dog in me would rather be out looking for deals not arguing about if I have any sense or not! I reserve that right to my husband! (smiles) Lori

The old ‘Bait and Switch’ mortgage companies - Posted by Lori Samson

Posted by Lori Samson on May 26, 2000 at 01:07:46:

I have really been having a lot of problems with mortgage companies using the bait and switch at closing. Since 95% of our properties are sandwich lease option we are always trying to get someone financed. I have had more problems with mortgage companies quoting one thing and you show up at closing and you have a higher interest rate, a ballon, prepay penalties, etc. on them and your sitting there wondering if you should yell “foul” or do you just go through with it because you are already there. 99% of the time we all go through with it. I even am guilty of giving in and closing because I just wanted to move on. Is anyone out there having a lot of this problem? It’s not just one mortgage company either. Lori

The Bottom line . . . . - Posted by dewCO

Posted by dewCO on May 27, 2000 at 23:46:40:

if you are in a state that does not require mortg. brokers to be licensed, is that it is truly the “wild , wild, west” for them. They can do (and some do) anything they want to. It is up to each individual’s consicous and own moral guides as to how much they will “do”.

The bottom line for many lenders si to: do as many loans, as fast as possible, and make as much money as possible on each loan.

The borrower wants: the lowest rate, the lowest loan costs and the best loan for their needs.

What do each of these 2 groups of needs have in common?
Why absolutely nothing, zip, nada!

Do you see why there could be problems?
The challenge is to find an honest AND good loan officer. Good Luck.

My Recent Incident …(long) - Posted by Glenn-PA

Posted by Glenn-PA on May 27, 2000 at 19:56:28:

I recently bought a rehab at an auction for $32,500 and plunked down $2,000 as a deposit. I was going to use a line of credit to buy, rehab and retail. Then I thought about all those taxes and thought maybe I’d sell on lease option instead - trying to improve my bottom line (and an excuse to buy a lease option course). So, I called a few lenders looking for permanent financing. One loan officer told me she’d lend 75% of appraised value as long as I had good credit. I met the loan officer and she took some info from me. Liking what she saw, she told me she could lend 75% of appraised value at 9.9% for 20 years with 2 points. She sent her appraiser over to the house and they came back with a $50,000 “as is” appraisal. She said they’d lend $37,500 (75% of 50K), with the above described terms, and I told her that’d be great and that I would like to develop a relationship with a lender as I was doing two or three such deals each year (I’m a part timer). The seller wanted time to move so we agreed to a closing date 60 days away. As the closing drew near, I called the lender and asked for specifics and she reiterated the 20 year, 9.9%, 2 points, $37,500 loan terms. I asked for a good faith estimate of my other closing costs and she kind of skirted the question saying she’d get one out to me. She also said she wanted me to use their title company (one they always use) and that they would prepare the deed and do the title search. I thanked her and told her I had a real estate attorney that I use for all my transactions (I have a great attorney and won’t budge without him). I gave her my attorney’s name and telephone number and told her forward any paperwork so he could look it over prior to closing. Two weeks prior to closing, I called the loan officer to see if everything was on track. She said they were preparing the deed and doing the title search and she again wanted me to use their title company. We went over the loan terms again and I reiterated that I had my own closing attorney. I asked again for a good faith estimate and she said she’d send it. I called my attorney and he said he’d not heard from the loan officer at all. My attorney said he’d prepare all the paperwork for a straight cash sale just in case the lender wasn’t going to come through (this is why I love the guy). My wife transferred money from our line of credit into our account. One week before closing, the lender still hadn’t called my attorney. One day before closing, my wife got a certified check from the bank. Still no call from the lender to the closing attorney. I called the loan officer at 4:00 p.m. the day before closing and was told she’d get back to me. She called me at 7:00 p.m. and told me they were ready to close the next day but that the interest rate would be 10.9% and she’d have to charge 3 points instead of two. I thanked her and told her I’d just pay cash (and I thought I heard her jaw hit her desk). She complained that she had considerable expense into this loan package and I told her I’d gladly accept the original agreed upon terms, otherwise she’d have to eat those expenses. I was straight forward and honest with this loan officer from the start. I never did get a good faith estimate. The loan officer, it seems, was trying to get me in a position were I had no other alternatives - and then tried to squeeze a few extra bucks out of the deal. I bought the house with my line of credit.

Since it was both spring turkey season and trout fishing season, I spent the next few days at my cabin with my brother and friends fishing and hunting. We were smiling and laughing a lot and my buddies always spring for the beer. I wish my attorney could have joined us this year.


I’ve been trying to avoid these threads, but … - Posted by SCook85

Posted by SCook85 on May 27, 2000 at 10:48:53:

I couldn’t let this one go.

Ed, I feel very strongly about the way that you came across to Lori. And the reason I do is because of my own experiences. Lori, can do all the due diligence in the world and that isn’t going to stop someone from trying to get over on her.

I personally know more about the ins and outs of the mortgage business then most of the brokers I have had the not worthwhile experience of dealing with.

Let’s take a look at the mortgage industry. We are coming off of what has been the most prosperous time ever for mortgage brokers. Interest rates have been low, purchase and refi loans have been generated like no other time in history. Many people regardless of their background became mortgage brokers because of the money that their was to be made- they were in it for the money. Mortgage brokerage houses were overflowing with employees. As in any industry, when you experience growth like this the quality of the employee dwindles. And in this case dwindles to the point where many of the mortgage brokers out their don’t know what they are doing. They are deceptive because they answer every question the way that you want to hear it- for lack of a better answer. They are unethical in their attempt to fight for the next dollar, having no problem with doing a NOO as OO, or pushing an appraisal by $20,000 so that your 80%LTV loan will get the seller 100% of their funds, or getting a family member to write a gift letter when in fact the family member never gifted funds, and this list can go on.

Now that interest rates have been rising, these offices that were busting at the seems are operating with skeleton crews if operating at all. When money was cheap, they could get people to overlook things such as balloons, pre payments, etc… Now that rates are a little higher their skills seemed to have diminished and they have had to seek work elsewhere.

My partner and I are very thorough in all that we do, and we have experienced the same thing that Lori did. We had a mortgage broker tell us that their would be no prepayment penalty, and our rate would be 10% on a loan. When we arrived at the settlement table the note was for 11.5% with a 3% prepayment penalty for 3 years. Now I hope that you won’t tell me to learn more about the business because I happen to know an awful lot about it, more then most mortgage brokers that I come across. Most mortgage brokers are in it ONLY for themself and don’t care about the customer- you know what is said behind closed doors Ed, don’t try to fool anyone. Of course they need to make money, but being deceitful is the wrong way to do it.

Just 2 weeks ago I finally had 2 mortgage brokers tell me that they wouldn’t be able to help me because I would not let them do what they had to do. In fact one of them came right out and said “If you will tell this one little white lie, you will walk away from settlement next week with $15,000- If you don’t, you will walk with nothing”. I chose to walk with nothing and sent him on his way.

To date I still have not had one of my 90+ buyers financed through an institution, mortgage brokers asked that I let them do what they had to and they would have gotten most of them done. So today I still hold about $2,000,000 in paper and intend to continue adding to it.

I’m not implying that this is what you do Ed, but you need to take a look at your industry and be honest with yourself. Just like their are investors who don’t know what they are doing, you will find mortgage brokers who don’t know what they are doing. All the bad wrap that “FLIPPING” is getting across the country is more so the fault of the mortgage brokers who put the deals together rather then the investor who bought and sold the house. The reason I say this is that I have met many more mortgage brokers who knew how to do what is being termed an “ILLEGAL FLIP” then I have met investors who know how to do it. Most investors don’t even know where to begin with doing it. The point that I am trying to make in all of this is that most mortgage brokers will say or do anything to get their brokers fee, and no matter how much Lori knows if she is dealing with someone such as this she is going to get “screwed” (Lori, tell your Mom that I said sorry).

Again Ed, I am not trying to disrespect you but you need to look at your industry as a whole. How many Ed Garcias are their across the country? Many cities would be lucky to have one. If so that person would become so busy they can’t handle all the business and service would either diminsh or they would have to start turning business away, or they would have to hire others either way most investors lose.

Steve Cook

REI Motivation - Posted by Jim (Alaska)

Posted by Jim (Alaska) on May 27, 2000 at 24:45:30:

Someone sent this to me today…seemed appropriate:

Many things in your life will change on your journey to success.
Learn to accept that change will always take place.
You’ll become secure, not by standing still,
but by growing, moving, and being energized.
Always be secure in the knowledge
that you can deal with what happens to you.

Have the courage to bet on your ideas,
to take the calculated risk, and to act.

You’ll always be secure to the degree that you can accept change.
Security will come from being able to bend your insecurities.
You must avoid breaking when things don’t go your way.
Your ultimate security is your understanding of this reality.

There is no permanent security on earth.
There is only opportunity.

Re: The old ‘Bait and Switch’ mortgage companies - Posted by Ed Garcia

Posted by Ed Garcia on May 26, 2000 at 12:15:07:


I’ve spent 2 years now teaching people (How To Have Lenders Fighting To Give You
Money) and your post is the reason why. I’m tired of hearing people moan and groan,
cry and complain, how they are being VICTIMIZED by brokers and other lenders.

The truth of the matter is, many investors like yourself, don’t know what they are doing.
Lori, some people set themselves up to be VICTMS and that’s why this is not the first
time this has happened to you. I’m not picking on you, but I’m just pointing out that
you have to accept the responsibility for your action just as you would if you bought a
property to find that it wasn’t what you thought. The first thing you would do is blame
the seller.

Lori, if you think I’m picking on you, because I’m a broker and that I’m defending
their position, that’s not true. I could care less about other brokers.

I’m coming on strong with you because I want you and others, who are reading this post,
to realize that it’s your responsibility to learn and understand financing because it’s so
important to your deal.

Lori, I GUARANTEE you, that what happened to you, would never happen to me. You’ll say,
ya right, that’s because you’re in the business. What you really are saying is that, I know
what I am doing.

I GUARANTEE this wouldn’t happen to Jim Piper, because he pays attention to every detail
and then sets the broker up to assure that there isn’t any changes. He knows what he’s going
to need in his loan package, and he knows why he needs it.

Lori, I’m aware that some brokers LOWBALL. They do it because people run around getting
quotes and then who do you think they’ll go to, of course the lowest quote.
It’s just a QUOTE of what the lowest loan the broker or lender has available.
So as a result, the broker is not low balling to deceive the borrower, but is doing it to take
the borrower away from another broker. I’m not justifying it Lori, because the result is the
same. No matter how you look at it, the broker deceived the borrower.

But let me tell you the other side of the story Lori. I can’t tell you how many times I’ve
Quoted the borrower the cost of a loan and had them go to another broker because the
other broker gave them a lower quote. I took the time to explain in detail how my cost is
the result of their qualifications. I was talking to def ears, or selective hearing, which ever
you choose. They’ve heard the lower quote and they’re off and running only to find that
the other broker in the end will bump them to my cost and usually more because in scheme
of things, they are now out of time and the broker knows that they’re not going to pull out
and lose the deal.

Lori, I agree with you, Lowballing, Bait and switch, what ever you want to call it, is not right.

But knowing that this element exist, the only way you’re going to guard against it, is to EDUCATE
yourself. To do that, you have to take the time to understand how the loan is being made, and under
what CIRCUMSTANCE’S. I can’t tell you how many times a borrower tells me something, or puts
some information on their application that does not check out. They stand there with a surprised
look on their face as if to say, what do you mean? Just the other day a seller tell me that he was
was SELLING one of HIS houses to a new buyer, only to find out that HE didn’t even own the
property. HE was in a “sandwich lease option”, and was selling the house to the other party of the
option. As you know when you buy with a lease option, you don’t actually buy the property until
you’ve exercised your option. All you do is, control the property, but you don’t own it. If you don’t
own it, then how can you sell something you don’t own. You get my drift, does this sound familiar?

So when a broker sees that your deal has shortcomings that many other brokers may have a problem
dealing with, that’s going to cost you.

CIRCUMSTANCE’S are usually the biggest reasons for cost changes. The CIRCUMSTANCE’S are usually never quite what the customer tells you in the beginning.

I do everything I can to answer questions and help people right here on this site so that what happened
to you, doesn’t happen to them. The only way it’s going to change Lori, is if you change it. The way to change it is, to either educate yourself, or find a broker that you trust and believe in.

Lori, it’s easier to educate yourself.

Ed Garcia

Re: The old ‘Bait and Switch’ mortgage companies - Posted by Jonathan Rexford

Posted by Jonathan Rexford on May 26, 2000 at 08:20:44:


the industry is changing every day, with Stipulations / Rates Changing. Its a problem in the industry. I decided to open up my own shop 3 years ago because I got tired of the same thing. I have learned that some MB are out there for the largest piece of the pie. If your T/B’s are Sub-prime then sometime you have two rats to deal with. The Lender and MB. If you are doing a Conforming loan then you always have the lock in rate. I had a loan several years ago that this mortgage broker charged me an extra point on the loan. I took his good faith estimate and tried to make him live by it. Well come to find out he really did not know how to fill one correctly and under charged me on a processing fee…lol from the lender. There are several good mortgage broker out there. There is one here on this site named Ed Garcia, I only spoke to him briefly at the CRE convention and listened to him and Terry speak but he seems to know his stuff. I believe he is Licensed in Just about every state now? Speak to him or call around to others and get the info or Better yet if you are planning to do volume get educated and get Licensed yourself. I do not activiely seek out loan Business, but I do plan to have a few brokers working the business here in Florida. I hope this helps.

Happy Investing,
Jonathan Rexford
Licensed General Contractor
Licensed Mortgage Brokerage Business
Rexford Incorporated
P. O. Box 650099
Vero Beach, Florida 32965
Office (561) 569-4087
Fax (561) 569-0279
Cell (561) 532-0029
Pager (561)458-5658

Re: My Recent Incident …(long) - Posted by JPiper

Posted by JPiper on May 28, 2000 at 12:40:10:


Enjoyed the post. I?ve done many times what you did in the end?walk away from something. I like the attitude of being willing to walk?.whether it be buyer, seller, contractor, tenant, or lender. But I would also say that I have always found it beneficial to analyze my moves afterwards, to see how I could have done it differently. And at least in some cases I find that had I handled it differently, I might have had a more palatable result.

So with that I?m going to make a few comments, knowing that I don?t know all the details.

First, you say ?I would like to develop a relationship with a lender as I was doing two or three such deals each year (I’m a part timer).? It?s clear here though that this desire was not achieved. You blew it off because you had another way to go, and because the loan would have cost you $375 more in points, and $25.12 more per month. Now I?m not in a position to say whether a relationship with the bank would have been worth these sums to you?.but to ME, it would have been.

One wonders though whether IF the bank had said at the outset that their deal was 3 points and 10.9 over 20 years whether you would have said no to the loan. In other words, would you have blown this deal off at these particular costs, or did you only blow the deal off because they changed the deal. Either way, right now you still don?t have the relationship, you evidently don?t have permanent financing, and you changed the way you were going to do the deal (lease/option because of taxes) which I presume is going to cost more than $375 and $25 per month in potential taxes.

No where in your post do you mention the rationale that the bank gave for bumping the rate and points. I suspect they didn?t just bump them with no explanation whatsoever. Certainly I would have wanted an explanation and would have asked for one. But you do say that you bought the deal recently, and that you set a 60 day close. It?s possible that you were buying during the time period that rates were rising, thus cramping the bank?s margin on such a small deal during that 60 day window. Rates have been rising this year. Right or wrong, I don?t know of lenders out there who are thrilled with $30K loans?.it?s hard to make money at that level. The lender experiences the same costs to do the loan, they just make less because of the size. How do I know? I have done lots of loans in that size range?and it?s just plain difficult to get lenders interested. I?m not making excuses for the lender, just pointing out that this was NOT going to be THEIR most profitable deal, and therefore, I really doubt that they?re losing much sleep over having not done it.

Your post makes it sound like you spoke to the bank, set a 60 day closing?.and then didn?t discuss anything with them again until the deal was getting near closing. I don?t understand this one at all. First, I personally wouldn?t have probably been interested in a 60 day closing. My attitude is strike while the iron is hot?whether it is with the buyer, seller, tenant, or lender. Certainly, 60 days during a period where interest rates probably were rising gives the lender plenty of room to start to believe they didn?t make such a hot deal. Further, you could have done the deal differently. You could have closed your deal quicker, and then rented back to the seller, escrowing part of the funds for pre-paid rent and damage deposit. Perhaps somewhat riskier in that you have now created a tenant?.but one wonders if the bank would have bumped the terms had the deal closed quicker?.we?ll never know.

But further, one wonders why you allowed all this time to go by without some type of commitment letter. And when the good faith estimate was not forthcoming EARLY in the deal, why you weren?t on the phone demanding this, following up daily, and perhaps if appropriate speaking with someone above this loan officer regarding this good faith estimate. It is federal law. In any case, it looks to me like this is an area that you let down in to some degree.

I was also interested in the fact that you balked at using the banks title company. That?s not something I would have balked at assuming the costs were comparable to that of your attorney. And afterall, you still could have had your attorney review documents, title work, etc if you chose. Personally, I don?t always close in one place?.never have. But I have learned about settlement procedures, and feel competent to review things myself. Even closing at my preferred title company though still gets a thorough review?and I still pick up errors. The point is that fighting over the title company seems to me to have little value?.that?s something I?m always willing to give away if there seems to be an advantage to do so. Some lenders like to close in certain ways?.and I?m not going to fight that issue.

At this point you seem to be one step farther away from your original stated goal?to build a relationship with the bank. You might have been able to use these bumps to further your relationship perhaps?but instead you walked leaving them with some unsatisfied costs. I understand that?.but again, it didn?t serve your goal. What is a ?relationship? worth exactly?

Understand that I?m just in the peanut gallery?.you?re the player. You did what you did, and who is to say it was wrong?

Good luck with your deal.


Re: My Recent Incident …(long) - Posted by WilliamGA

Posted by WilliamGA on May 28, 2000 at 11:49:28:


Had pretty much the same thing happen to me a couple of months ago. I had two different properties on balloon notes and needed to refi. Got the process started with a company out of Florida that “absolutely could do loans in GA” (I specifically asked). Well, about two weeks into the process, about the length of time they told me it would take to close, another broker calls me, seems the first has passed the deals off to them since the first guys can’t do loans in GA!

Another 2 weeks go by, and after several calls to them trying to get a Truth in Lending, I give up. I get financing elsewhere. Then, low and behold, I get a call one day before my balloons were due. “We are ready to close, they say”. Too bad I say, I have it covered. Boy are they hot! We have put alot of time and effort into these, they say. Seems they have even ordered appraisals on their own and now they are demanding repayment.

They will, “place liens on my property and get a judgement placed on my personal credit history” if I dont get a check to them pronto.

After a letter from my atty. asking why they couldn’t even seem to get a TIL out to me or answer my calls until it seemed I had no other choices but to close the deal with them, they decided that they really didn’t need me to pay for those appraisals after all.

I consider myself a pretty detail oriented person. And I think most of the long timers here who I have had the pleasure of speaking with will tell you, I ask ALOT of questions, so how did this happen to me? Can’t answer that but I can tell you that this isn’t my only broker story. I have a few.

All part of the business I guess.

Re: My Recent Incident …(long) - Posted by Craig

Posted by Craig on May 27, 2000 at 20:39:00:

Great story Glenn. It’s good to have the attitude of always being willing to walk away, even at the last minute. There’s a reason why this gets done over and over to people. Because it’s expected that at that point you won’t walk. It would get done a lot less if more people would or felt that they could walk.

Re: I’ve been trying to avoid these threads, but … - Posted by Ed Garcia

Posted by Ed Garcia on May 28, 2000 at 09:43:01:

Hi Steve,

It’s been a while, and I hope things are going well for you.
Steve I knew by the way I answered Lori’s post, that I was going to ruffle some feathers.
Some how, it also appears as though, I’m defending those big bad dishonest brokers.

Steve, interesting enough, my message to Lori wasn’t about brokering.

My message is, it does no good, to wine and cry and finger point, when things go wrong.

We have to accept the responsibility for our actions when things go wrong,?.Just as we
take the credit, when things go as they should.

My message is , you can’t depend on anyone in this business but yourself, therefore it is important to learn all aspects of the business. Financing and real-estate, go hand and hand, that’s why it’s paramount to learn it.

Ed Garcia

Re: I’ve been trying to avoid these threads, but … - Posted by CarolFL

Posted by CarolFL on May 28, 2000 at 07:20:09:

Steve, I had the exact same thing happen at the closing table - or the day before - and had myself in a bind where I had to go ahead and close on one loan in order to close on another… and worse yet, it turned out to be an adjustable… so guess where we are today!

The broker has called repeatedly for more biz. Right! And his explanation was that … well, this was what we had to do to get the loan through.

However, I will take accountability for putting myself in that predicament where I felt I had “no choice” but to go ahead and close. I guess that’s where the learning curve and personal accountability come in.

Thank goodness for the good ones!
Take care…

Re: Hold the phone Mr. Mortgage Broker! - Posted by Lori Samson

Posted by Lori Samson on May 26, 2000 at 23:02:18:

I agree that we do have to learn as much as we can about your business but… you are the professional in that business, not me! I go to the Doctor and if he mistreats my illness it’s my fault becaused I won’t study medcine to know what is right or wrong? When I had my children I went to the Doctor trusting him for my care and just because I want to be in the ‘family’ business I am not going to study OBGYN! I think you are peeved that so many of us complain. Because I complain I didn’t get good service at the dress shop I am not going to learn that business just so I can know if I’m getting a good deal, good service or ripped off. It is a sad state that we can’t trust the professionals in the mortgage business to do us right by and now we are having to learn the business just to ensure we won’t get screwed. (sorry Mom, if your reading this I know you always hated that word) You insulted me for not knowing your business! Why don’t you learn my business and then just treat me fairly?To say I don’t know what I’m doing is ignorance on your part! I do know real estate investing not the mortgage business, or appraising, or building, or wiring, or sheet rocking, or paving driveways, or tree trimming, or dry wall, or ceramic tiling or, or, or, or… but not wanting to know what you do is my ignorance? I somehow don’t think so! Lori

Re: The old ‘Bait and Switch’ mortgage companies - Posted by Craig

Posted by Craig on May 26, 2000 at 17:36:27:

The only problem I have with your suggestion, well not a problem, but addition to is. If a broker is being deceitful, no matter how educated you are, sometimes the only way yer gonna know he’s pullin’ a fast one before you get to closing is. If the broker will allow you access to the complete file every couple of days along the way. You can call and ask and ask, and try to keep up to speed, but if he’s lying along the way or withholding info, then how else can you know what’s really going on.

Re: The old ‘Bait and Switch’ mortgage companies - Posted by Sean

Posted by Sean on May 26, 2000 at 16:17:44:

Nice post Ed, but a little strong to say the least! Its understandable, as you are a Broker, but you came across extremely defensive! Rather than take the attitude that Lori may not know what she is talking about, recommend you emphasize the steps she and others should take to insure that they don’t get into a “bait and switch” situation. For example having a written commitment from the broker BEFORE they go to closing. Being a broker, we are sure you know many other possible safeguards? You do emphasize that Lori get herself educated. Why don’t you assist her by, providing part of that education? You provided some, but we are sure you could agree, you could provide a lot more. Granted Brokers and Lenders,especially ones in other than the main stream, don’t by and large, command a lot of respect and a few as you say may “deceive” a borrower, to get him away from the competition, but we are sure you would agree these should be in the minority? Help her out, Ed! Don’t automatically assume she does not know what she is talking about. Thats kind of a blunt answer that tends to turn some people off. As somewhat of a financial wizard on this site, some people, especially newbies look up to you as “speaking from on high”. Comming across in a more positive manner, would certainly help. No offense, just one man’s opinion.

Re: The old ‘Bait and Switch’ mortgage companies - Posted by Craig

Posted by Craig on May 26, 2000 at 09:12:33:

The broker ought to be giving you some sort of signed fee agreement.

As far as the loan goes I would back out if they didn’t tell me something until the last minute at the closing table. I would never send them business again. I would let the next broker I planned on working with know that it’s happened to me before and I didn’t put up with it, and I won’t put up with it from them.

Your post is right on target … - Posted by Glenn-PA

Posted by Glenn-PA on May 29, 2000 at 06:36:50:

Jim - You’re 100% correct. I still don’t have the lender relationship that I’d like to develop. Despite my long post, I didn’t list each contact with this lender. We were in frequent contact. I didn’t decline this loan because they increased the rate and points. I declined because of the manner in which they did so. I realize that I’m a small fry for now, however I’m a very strong borrower with a very high credit score. The lender with whom I want to develop a relationship will call me and let me know in a forthright manner that our situation has changed. Honesty, plain and simple.

Jim, I appreciate your reply. It really got me thinking. I feel like I learned something from this thread. There are some unscrupulous lenders out there. In the end, we are responsible for becoming informed consumers. I need to constantly analyze each aspect of every transaction in relation to my short and long term goals.


Re: I’ve been trying to avoid these threads, but … - Posted by SCook85

Posted by SCook85 on May 28, 2000 at 11:09:40:

Things are going well on my end, just riding this ever changing market. Thanks for asking. I hope all is well on your end.

Word for word, your response to my post sets much better with me. I’m sorry I didn’t get that out of your original post to Lori. I also tell people the same thing. In fact I tell people that you can’t have a business in real estate without knowing financing as well.

Thanks for clearing things up.


Re: I’ve been trying to avoid these threads, but … - Posted by Ed Garcia

Posted by Ed Garcia on May 28, 2000 at 10:38:55:

Good morning Carol,

I couldn’t help but see your post to Steve, and I’d like to make a comment, where you mentioned
the responsibility part of it.

The responsibility begins when a borrower selects the broker in the beginning.

How did they select the broker?

Was the broker referred by a realtor, a friend, a relative, a business associate, etc.

What do you know about the broker?

Does he specialize in SFR’s, Fannie, Mae/ Freddie Mac, FHA’s and does he have a good reputation, etc.

What about me the borrower? What kind of borrower am I?

Do I have PERFECT credit, and am a Fannie Mae/ Freddie Mac loan with the desired down payment,
what you would call a LENDERS DREAM. Or do I have several pieces of property that after you figure
In my vacancy at 25%, I’m out of budget, and I’m not showing my income so I have to go stated income,
on a house that is none owner occupied, and make the broker shop for a $30,000 loan that the broker won’t
even be able to sell in the secondary market.

The point is, you must know what kind of borrower, and where you stand as far the quality of borrower you are. Most borrowers assume that they are an “A” borrower just because they have good credit and that’s
just not so.

What do I know about the loan, the broker is giving me? and WHY is that the loan that I qualified for.
CIRCIMSTANCES, will always be the answer. I’m either lacking something or not showing it.
It could be the type of loan (NOO), property, area, condition of the property, any number of things could change getting the loan and cost. One of the main differences of cost change is, because the broker
originally designed the loan for a specific investor, and then a change in the loan information now has to
make the broker change investors.

BUYER BEWARE should always be a consideration, no matter if it’s brokering a loan, adding a roof,
no matter what course of business your transacting.

I think it’s natural for us to get into a comfort zone with someone we’ve done business with in the past.
We TRUST them, because they have proven themselves trustworthy with past performance.

Carol, as you know I am more than just a lender/broker. I’m an investor and businessman as well.
I have certain business principles and practices that I use no matter the business.

What I have been preaching is just good business. Carol when we don’t have knowledge, we put ourselves
in a position to be taken advantage of.

Take care Carol, and tell Dennis I said hi,

Ed Garcia