Look, I understand that people want to shop around for a “good deal” and that I don’t have the lowest rates in the market. I deliver excellent service and solid advice and I like to think that I’m worth a little bit more than some nameless drone at some internet bank that doesn’t know what he is doing, doesn’t care about his client and will take 3 months to close a perfectly clean loan. Still, I recognize that it is natural for people to want to know their options and I encourage it. Frankly, comparing me to most other lenders makes me look good!
Normally this shopping process happens at the beginning of the process, before anyone has committed to anything. On a home purchase this normally happens during the pre-qualification process. Typically that means that by the time a buyer finds a home he likes and gets an offer accepted that buyer has settled on a lender (hopefully with my office). This is because once they are in contract the buyers have a deposit on the line and they will be spending money upfront for things like a home inspection and an appraisal.
There are some people that go off the reservation and go about “shopping” the wrong way… and end up hurting themselves because of promises made by a less-than-scrupulous lender. We have a situation like that in the office right now. We’ve been helping this borrower shop for a home for about six months now and he finally got an offer accepted at the beginning of December on the purchase of a short sale. In fact, our office was integral in getting the short sale approved! We got his loan approved very quickly. obtained an appraisal and then, at the beginning of this month, we produced final loan documents for him to sign and close his deal. Through out this whole time we spoke to him regularly and emailed him multiple times a week. Never did he tell us that he was also applying with a different lender. Now that we have documents ready to go and a lock about to expire (I feel it is important to mention that the loan is the exact terms we disclosed/discussed in November, so it’s not like we jacked up the rate or the costs) and we get a call from the listing agent that a new appraiser is trying to see the property. Turns out the other lender has been sitting around for a couple of weeks and is now trying to get the property looked at. The scheduled close is this Friday. The short sale approval is up this Friday. Our lock is up on Monday.
We call the borrower to find out what is going on. He doesn’t answer any calls. Emails to him go unanswered.
Now he is going to lose the sale, his deposit, what he paid for the appraisal, what he paid for the inspection and what he paid for the HOA cert. I think that’s about $6500.00. The sellers won’t grant him an extension since there are loan docs sitting at escrow ready to sign and a lender that performed exactly as promised.
All this could have been prevented if he had simply been straightforward with us. We would have bowed out gracefully and spent our time, energy and money on clients who want to work with us.
I don’t get it… why mislead us about this? I’m sure he expected honesty from us, why wouldn’t he return the same? Why not return our calls? Why not tell us directly?