Posted by Merry_CA on 6/30/05 2:38pm
Msg #49093

Baffled Borrowers?

I think that at least 10 of the last 12 loan signings I have done have been for borrowers who hadn't the faintest idea what kind of loan they were signing for. Most had dealt with a mortgage broker over the phone and simply fed all their personal information to someone who "promised" to get them a great loan at a certain (very low!) rate. Now here's "rest of the story"... broker goes shopping for a loan... calls borrower back with the "great news"... of course he/she has found a lender at a "great rate"... of course not as low as the one that inspired the borrower to give up all their personal information to the broker in the first place. Now... borrower waits for a couple of days and if they are lucky the broker calls one more time with (you got it)... "great news"... it's time to close and "you'll be funded within the next 96 hours or so." "Now you will be able to get going on that pool house!" Broker disappers and the next person the borrower hears from is the trusty NSA!... We whip out the loan docs, ready to be in and out of there in 45 min. or so and lo and behold... "these rates are not what the broker said they would be"... and what is this prepay penalty "she didn't tell me about that!"... "what is an "Option ARM?""... "I don't know anything about that kind of loan... do you?"... and on and on and on...
Is anyone else experiencing this?... or is it just CA?... or maybe it's just ME!... ;)

Reply by Kim_NJ on 6/30/05 3:19pm
Msg #49100

That is pretty much the norm for some brokers. We know that for certain brokers we need to factor in 15 - 20 minutes for calls to the LO who will undoubtedly say whatever is needed to get the deal to close.

The best ones are when the borrowerer suddenly has to come up with money at closing. "Does the borrower know this", we ask "Oh, yeah, I mentioned it to them" they say. Get to the borrowers..."We were supposed to get $15K back, noone told me I had to come up with cash." Gotta love it!

Reply by anonymous on 6/30/05 7:28pm
Msg #49160

Just did one where the borrowers were going from 6% fixed to almost 7.65 ARM 2/28, paying $10,000 in settlement costs to get $5000 cash out. ?????? I have absolutely no idea how the broker sold this one. Even the wife asked her husband "why are we going from 6% fixed to 7.65% adjustable?" Should have sold them an equity line if all they needed was the $5000 cash out.

I just don't get it.

Reply by Anon on 6/30/05 9:51pm
Msg #49192

One thing about a 2/28. Most times these are people with credit problems. The idea is to fix the credit in the next 2 years (fixed part of loan) and then refi again. Now, like you I thought this was awful.... High closing costs and such. But many times these are people with 22% credit card debt and they are back up against the wall. So, they don't have much choice. No lender is going to give them a 5.5% rate. They are a risk. And as we know risky people pay more.

On the other hand, I once went to a closing (that didn't, by the way) where all the borrower wanted to do is escrow his taxes and some hotshot LO said they could do that with a refi....Need I say more.

Reply by Anon on 6/30/05 9:46pm
Msg #49190

Sounds like Ameriquest. Those closings are usually 2 hours. One hr. to get it straightened out with the Loan officer and the second (if they go ahead) is to sign.

Reply by stamper_WI on 6/30/05 9:52pm
Msg #49193

What amazes me more is borrowers borrowing against the equity in their home to the point of having to get PMI and extending the life of their loan to bay off 30,000+ in credit card debt. Then they open their wallets to get their Id's and theres a dozen credit cards.