It seems everyone thinks the web is the be all and end all of mortgage
lending. But, there are significant differences in how the use
of the web is perceived. There are those who think the web will
be the demise of all mortgage lenders as we know them. All loans
will be submitted through a web site with a faceless, and sometimes
voiceless, lender. Or, the lender will speak to you, and may
even send you friendly emails. No more going into a lender’s office
and wasting precious time. In a perfect world, this could happen.
Of all the loans I originate each year, about one-fourth to
one-third are perfect-world loans. And most of those still need
some type of tweaking and guidance that can only be provided by
an experienced mortgage lender.
Others think the web is a fad, and borrowers will ultimately
come back to the comfort of dealing with a friendly face. The truth
lies somewhere in between. The World Wide Web is here to stay,
and it is a major tool in the mortgage lending industry. Just how it
is used is still evolving. My company has, in my humble opinion,
the best combination. We have branch offices in many states, but
not everywhere. We are always upgrading our technology to provide
the borrower with the best advances in lending. We take loan
applications face-to-face, over the telephone, and through our
web site. The big advantage is that we will always have an experienced
loan officer handling the loan. The borrower and Realtor
know where to find me. Or, as one Realtor told me recently, she
knows where to come if I mess up the loan and cause the borrower,
and her, any pain. This comment came after a web lender
delayed one of her sales significantly and the borrower ultimately
went to a local lender. Even if I take the loan by telephone or
through our web site, I will be in contact by telephone, mail, and
e-mail. If the borrower is buying locally and applying from afar,
they know I will be available in person after they move.
The website is a great tool for the borrower who does not have time, or is
too far away, to come into the office. They can apply in the middle
of the night, naked. Once the loan is downloaded, I will call them
to confirm and to get any additional information necessary for the
approval. And to make sure they are applying for the best loan to
serve their needs.
At the very least, anytime you use an on line lender, they
should meet certain standards:
1. They should be well-known, established, and wellfunded.
2. They should provide all fees and costs up front before
the borrower applies for the loan.
3. They should have experienced people handling all the
loans.
4. They should be readily accessible by telephone, at the
very least, and preferably at a local or regional office.
5. They should be familiar with the area or have a local contact
who does know the area.
6. They should have enough variety of loan products to
make sure all possible ways to finance the property are
available. And the lender needs to know how to use
them.
7. Their application site should be very user-friendly and
capable of answering basic questions. It also should have
a toll-free number to call if the borrower wants to talk to
a person before making any type of application.
There are other services that should be offered, but if they
meet the aforementioned standards the borrower will at least have
a reasonable chance of getting the best loan. But I wouldn’t count
on it. Even lenders where you can go right to the office have a hard
time getting good knowledgeable people. A lender far away and
handling a large volume of loans from a central site will not be able
to have anywhere near enough experienced personnel. I don’t
know anything about the markets in California, other than the fact
the state is slowly slipping into the Pacific. Why would you expect
someone in California to know anything about the markets in Virginia,
or the costs associated with closing a loan there?
At the time this book was revised in 2000, several on line
lenders had failed, leaving many borrowers to frantically search for
another lender. One Realtor friend of mine who lists several builder’s
houses told me he had a large number of purchasers who decided to
apply on line, and every one of the loans had been a nightmare. Of
course, most of the worst ones will eventually be weeded out. You
just want to make sure your lender has staying power.
