“There is a real reason why I never recommend internet and out of area lenders… This is specifically the reason why. There is no one who can be held responsible for their actions.”
The above is from an email from a friend and fellow Realtor, and he says it as well as I ever could. With all respect and friendship to the lenders I know personally around the country ….
If I could force my clients to use only local lenders, I would. In 2011, I will do whatever it takes to make this a reality.
Why? We are accountable to each other. They know our market, our people, our idiosyncrasies.
The local lenders I recommend sometimes make mistakes; we all do. The difference is that I know and trust them to acknowledge and fix said mistakes. I recommend people I trust.
The “out of area/internet lender” battle is one I have fought my entire career.
As I wrote in 2006:
Picture this – client comes in pre-approved by an out-of-the area lender. Great, right? Not necessarily. I express my concerns to my client but the client has already started the process and does not want to start over. Lender asks for my recommendations for attorney/title company, appraiser, etc. (local lenders tend to have pre-existing relationships to take advantage of) I consult with my client to ensure that he approves, and proceed. Time comes for closing … and no closing happens. The lender answers questions with “maybe,” “probably,” and “hopefully” regarding a closing timeline. Both sides – Buyer and Seller – are thrown into turmoil. The house is vacant. The buyers are living in temporary housing, desperate to purchase the house they want. Hopes and dreams have been smashed because an incompetent, unknown lender does not have any reason to work harder, does not have any relationships to maintain, has no concerns regarding accountability. There will always be another internet lead.
If it’s too good to be true, it probably is.
I work from horror stories and extremes. Here’s another potential “horror story” :
Great buyer clients are working with a local lender. All is going well. Until. 13 days before closing, the lender says that he can’t do the loan. Game over, right? Nope.
He calls another local lender with whom he and I both have excellent working relationships and passes the package over to the other local lender. Lender #2 pulled a big one out of the fire and we closed on time. And the buyers were thrilled. They went through stress they didn’t need, but in the end, all was good. Would this have happened with a Lending Tree lender? I’m hopeful that I will never find out.
Reputation matters. I’m inclined to do whatever it takes (so long as it’s moral, ethical, legal) to ensure that my clients are taken care of. I’m not inclined to work with anyone who doesn’t take care of my clients.