Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Shmuel has over two decades of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. Shmuel provides a uniquely holistic approach to comprehensive real estate and financial matters that goes well beyond any single transaction. Shmuel is an award-winning financier recognized for maximizing the short-term and long-term objectives of his client. As a contributing writer to many local and regional newspapers and publications, his insights have been featured in the media for many topics, including mortgages, personal finance, appraisals, and real estate trends.
I can no longer sit idle watching and hearing what I have about the experiences people have had “out there” with their mortgages. Admittedly, everyone has room for improvement, and I will be the first to admit it on my end. The financial system has been overwhelmed with high demand in borrowing for well over a year. The challenges in dealing with the necessary banking requirements, loan administration, and regulatory compliance have been daunting. Undeniably, not everyone is getting the exemplary customer experience they once were and certainly deserve.
Strained back-office operations across the mortgage industry, unfortunately, appear to be a commonality these days. Competitive “rates and terms” are essential in all markets, but you need more than that. Once you find a satisfactory quote, it’s critical to determine if you will have a good rapport with this agent and company. I also encourage everyone to candidly ask what interaction and communication should be expected throughout the loan process. You should also ask if this individual will be your point of contact throughout the transaction or whether you will be interacting with other representatives from their company.
Some companies are great at “hooking” you into a transaction. They have highly charming and aggressive frontline associates that will relentlessly persist until they get your commitment. Often, once the application fee or deposit is received, you are moved along the conveyor belt and handed off from department to department as your loan application advances. If it will be the same person handling your request for the entire transaction, ask them, or do an online search, to learn how long they have been working at this company and in the mortgage industry. You will be surprised at what you find out about the inexperience of many of these people with whom you are putting your faith and trust.
There is no reason not to consider how your mortgage representative or company gets paid and what incentives the people you are speaking to have regarding your loan. Many mortgage companies “out there” are now touting how they don’t pay commissions to their loan originators. They use this marketing ploy to counter the stigma that loan officers or mortgage brokers have their own financial agendas when dealing with applicants. Of course, they don’t mention that these associates have fat bonuses for achieving certain production levels that they relentlessly pursue.
I recently spoke to a client who needed assistance with an investment property he was trying to purchase. He didn’t know the best way to structure the transaction but knew that the company he worked with a few months ago to refinance could not give him the same guidance that I could. When I looked at the loan documents from his recent closing, I was disgusted. The associate he was working with, inexplicably placed him into the wrong loan option. They shoehorned him into a low rate mortgage that “sounded” great—except when you realize it was a 15-year mortgage with thousands of dollars in extra upfront points. Perhaps his loan officer didn’t care, or it really didn’t matter, as long as he booked the deal. It seems that this was the best way for the other agent to make his offer seem like it was the best; It wasn’t.
The notion of “earning” someone’s business and the motivation to procure their repeated business—and perhaps referrals and recommendations from them—is what often ensures the best level of service and diligence. Finally, in all these years, I learned a valuable lesson about my competitors—and that is that my only competition is me. I know it’s not the industry gossip some of you were hoping to read, but it’s an important distinction of how I have built my business. My goal is to improve daily and to truly offer genuine advice and guidance to my clients to earn their business for life.
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