Written By: Gail Foster
I’ve told a horror story or two about some of my customer’s experiences with lenders. The reason we have horror stories is because most people have no idea how to choose a lender. Most use origination points and interest rate as criteria for making their choice but this doesn’t reflect a lender’s ability to close a loan smoothly, with finesse and good customer service. It’s just numbers on a piece of paper. Buyers may choose their local bank or jump online to see who will quote the best rates and lowest fees. And of course, we have the friend-of-a-friend referral method. None of these methods is based upon factual information regarding a lenders track record or level of past customer satisfaction.
Many buyers do not know the difference between a mortgage broker and a direct lender. They don’t understand why Mary can be quoted one rate and they are quoted another or what the difference is between a pre-qualification letter and preapproval letter is, I’m not sure I know the difference or if there truly is a difference. They expect that if they have received a preapproval or prequalifcation letter they will be approved for the loan, not always the case. Realtors try to refer clients to lenders with a good track record of closings in hopes of creating a smooth buying experience for their client. But some Buyers just go their own way. Let’s face it the process is just not user friendly. We’re selling a product and a service here, let’s get the customer on board with confidence and trust.
Much has been done by the US government and lending agencies to create new regulations that protect Buyers from mortgage fraud and predatory lending. Still more has been changed in lending guidelines to create stronger borrowers and stem the rising tide of foreclosures. But we need to go still further. Our customer base is shrinking because of misconceptions about the availability of funds, new guidelines and regulations, as well as poor customer service to those that do make the leap into home ownership. And let me tell you, whether a buyers’ perception is correct or not doesn’t matter. They will tell their horror tale far and wide, to family, friends and co-workers.
We have within the industry companies that monitor job performance of mortgage industry professionals, MARI is one of them. It gathers complaints of inappropriate behavior and disseminates that information to its members. It can have quite an impact on a company’s ability to do business. What if a lenders track record was monitored, tracked and published so the public would have access. A third party company could collect a lender’s monthly numbers ie How many loans closed in 30 days or less, 45 days or less and so on. Customer satisfaction could be tracked, ease of transaction results gathered and a rating for customer’s could be established on a number of different issues. It seems to me that lender participation would be positive for business as long as customer’s were satisfied with the job done.
I’m pleased with some of the lending changes, the industry must get back on firm footing if we are to create a climate where home ownership is a dream that can be realized by an abundance of people. We must work harder to educate the public regarding the changes and build confidence in the industry’s ability to provide a service that is close to painless and a positive part of owning a home. Transparency in the industry is a wonderful place to start. Bad press is bad for everybody, we must work harder to let our track records and public opinion of our quality of service be known.
About The Author
Gail Foster - As an active real estate industry professional for the past twelve years, Gail Foster is a proud licensed mortgage officer and a Realtor in the state of Maryland. If you would like to become a writer for NAMU®, please email us at: firstname.lastname@example.org.