As a mortgage banker, my pipeline is just that: "MINE". And, my clients are "MINE". My agents are "MINE". My title and escrow company's are "MINE". My underwriter is "MINE". My processor is "MINE". And, my doc drawer and funder are "MINE". In fact, the other person involved on a MY files who is not "MINE" is the appraiser (no thanks to HVCC!!! LOL). The fact that every aspect, process and procedure of the lending process is "MINE" is why transactions close how and when they are supposed to. Purchase contract designated title and escrow companies become "MINE" through the initiation of the contract and are equally represented.
I read Kim Boekholder's post My Buyer's Loan Officer was Fired! and immediately felt a great deal of empathy for both Kim and her clients. I am sending my best thoughts out to the Universe that all comes together for all concerned; however, there is also a "behind the scenes" aspect to Kim's situation that is glaringly obvious to me and prompted this post.
Two things immediately come to mind when I read Kim's post. One, conjured up by the Loan Officer + Credit Union situation. The other, is that I am quite certain that said loan officer had no clue or control of the file. The 'terminated" loan officer may have truly been a very mediocre loan officer.......on the other hand, maybe not. Let's examine the role of process and procedure in the lending process.
Does your loan officer have to get some P.P.? I promise, without it, every aspect of the finance side of your real estate transaction will be the equivalent to riding Space Mountain at Disneyland. Two of the most important words (should be) in securing financing are "Process and Procedure". If your loan officer doesn't have P.P. - both established process and procedures AND control over process and procedures - it is anyone's guess whether or not your transaction will close.
It is incumbent upon both real estate agents and consumers to understand that most large retail banks, credit unions and internet banks work with a centralized processing business model. The loan officer's role in the transaction is to originate or "close" the sale. Once the file is "closed" it is forwarded to the processing pool. The unknown "processor" prepares the file and submits to underwriting (most of the time, the loan officer is not allowed interaction with the underwriter). Once approved, suspended or declined, the processor will email or leave a voice message telling the loan officer what to "say" or "get" from the various parties.
As a "closer", the loan officer will have limited or not contact with title, escrow, agents and only cursory contact with the borrowers. His/her job is to close more...not service existing files. The net result is that any communication coming from the loan officer is really just a forwarded message from someone else who really knows what is going on with the file. Think of centralized processing as the mortgage version of the game "Telephone"...by the time the message gets to the end recipient it (the message) may have little similarity to the originating communication.
Conversely, a professional mortgage banker/broker is the primary contact and communicator for every aspect of the lending process. Essentially, the "buck stops here"and the "surprises' on a file on kept to a minimum. In a properly executed file, the process and procedures are in place to properly navigate the file through the contract period for a successful and timely closing. The loan officer is the playwriter, director and film critic of the file.....and maintains control of both the creative and the technical aspects of the file.
My second observation has to do with the knowledge and professionalism of the loan officer at your local bank or credit union or internet lender. Please understand, I am not "bashing" all bank sponsored loan officers...I cut my teeth as a personal banker for Security Pacific Bank. The point is: I cut my teeth...I was a baby loan officer and I had much to learn.
The new National Mortgage Licensing System takes effect January 1, 2011. The testing and background checks and paper work was a grueling process...note, I saw grueling....not hard. I completed the twenty hours of compulsory S.A.F.E. coursework through an online provider. It required me to single click through countless pages and chapters to get to the test......which I did, without reading one page. Passed the course with a 96%...I presume that means I know something about mortgage financing.
The point of the subject of NMLS testing is that current statistics indicate 30% to 40% of existing examinees are failingthe required tests. But, hey, they don't have anything to worry about...they can just go work at a depository bank, credit union or F.D.I.C. sponsored mortgage bank. No tests, no background check and no credit check required. A review of your local Craigslist will provide all the evidence you need by the ads for "Loan Officers Wanted...No licensing required".
Want to place any odds on where Kim's clients loan officer will land?
When interviewing a potential loan officer ask them two things: 1). Are you licensed (implying they are educated, ethical and bonded)? and 2). Can you please explain your personal and internal processes and procedures?
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Deborah "Dee Dee" Garvin
NMLS #279125
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I am continuing to build my team of mortgage professionals. Please contact me to discuss how New American Mortgage and I can help you thrive in the mortgage industry. NMLS license and/or the ability to obtain one is necessary.
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Good evening Deborah,
Okay... okay you got me on P.P. I love it Process and Procedure..yes..yes..you have my vote!
Deborah,
You are the only mortgage pro so far, who is holding my attention from the first line to the last line. I do not know why I am reading it, it is not my bread, but I do, and I enjoy that reading.
I understand how it works in general, you know it in details, and maybe it makes it so interesting.
Your posts are really-really good
As Jon say, you know your stuff, Deborah.
This is why Loans closed with a Broker work better than loans with large banks -Ownership = Responsibility.
Dorie, Love your comment...seriously, the greatest loan officer is the world will do a "crash and burn" without the process and procedures behind them.
John, I hope you know how much I appreciate your comments! You are among ActiveRain "elite" for me and your appreciation of my work is very humbling. Thank you!
Jane, Bless you...if I don't by now we are all in trouble. It is always my intent to attempt to show agents and consumers what is happening behind the veil.
Gene: Large banks are literally process mills...it is all about volume, not service. And certainly, not YOUR transactions!
I say keep on sending your best thoughts out to the universe, and keep on writing great posts, too!