Mortgage Broker Dilemma

**oneofthecrowd** · 01-31-2009, 01:24 PM

I'm presently in a dilemma regarding my home purchase. Everything seems to be "on track" but my mortgage broker keeps asking me for more and more personal information that he says is required to finalize the loan (FHA). First he says he just needs one more item. When I supply him with this item, he'll say he needs another item (copies of previous documents, etc.) And again, and again for about two weeks now.??

Actually, a friend told me to never use a broker but use a direct lender because brokers charge a lot of hidden fees and things, and they "sell" my loan to other banks later. I got connected to this broker through my credit union as they don't do FHA loans. So, since he's associated with my credit union, I decided to stick with him as he gave us a lot of help and advice and even locked us in on an excellent mortgage rate. I began to wonder about him when one day he gave me two stacks of paperwork. One smaller stack (20 pages) that he was hoping I would sign immediately and another stack (53 pages) that contained copies of the smaller stack plus other important documents about the loan. I decided to take them all home and bring them back to him later. I'm glad I did just this. He made some careless (or deliberate) mistakes on some of the papers. One, he typed in that I wasn't a first time home buyer when I am. Two, he typed in the wrong date of the age of the home (he put that it is 20 years old instead of it being over 50 years old). Three, he wanted me to sign a tax document with blanks (when the document itself read "never to sign when lines 6 and 9 are blank"). There were other errors but these were the three that got my attention most. Could there be reasons for him doing this or does it matter? He explained that these papers were just a disclosure and nothomg final. I corrected the mistakes myself and gave them to him making sure I had exact copies of each. Does anyone have any advice or suggestions regarding what I should or should not do?

Now, I'm thinking of cancelling the whole shabang instead of continuing this endless repeated process unless this is the norm on how things go. I am a first timer to everything but sure am confused.

**strategiclm** · 01-31-2009, 02:29 PM

Mortage brokers do often have more fees than a bank. But they can often find a way to get a loan done that a bank cannot.

Banks sell most of their loans too. So that's not really an issue.

It really sound like this guy is just not very good at his job. He is probably not crooked or anything, just careless, and shoddy with his work.

It would likely be a good idea to talk to a few local banks to see what the total cost of doing the loan would be. If it is less than with this broker, go with them.

But if you are not getting good vibes from this guy, it may be best to move on.

Chris

**jpoey** · 01-31-2009, 03:41 PM

get rid of the bum fast!!!

**oneofthecrowd** · 01-31-2009, 08:32 PM

My L.O. says he understands and agrees with my situation but his underwriter needs more info. I have gotten three other pre-approvals, including two from direct lending institutions, but they say they can't beat the deal I'm getting from this present lender. I'm supposed to close on this home in ten days or I'll be paying $150 a day till it does (according to my agent...?). Can banks do a loan in a week? One bank says they need at least 21 days.

I guess I'm going to have to tell my L.O. that I'm all out of paperwork to see if he backs off and approves the loan knowing he's going to lose it otherwise. I guess the worse that could happen (besides losing this home) is I would lose my earnest money, right? Of course I know I've already lost what I paid for appraisal and inspection.

**donrock** · 01-31-2009, 10:43 PM

Being a retired mortgage broker I know how tough it is to deal with FHA. It sounds like maybe your LO hasn't enough experience with FHA to have got all the paperwork they required to you in the first place. If he is making mistakes then the underwriter will make him jump through hoops until everything is correct. You might want to talk to his broker or owner of the company and tell him whats going on. He may be able to take care of the problems so you can close your loan on time. Explain to your LO that because he has made mistakes that you will expect him to pay the $150 a day penalty. That should get you some action in the right direction.

Good luck,
donrock

**oneofthecrowd** · 02-02-2009, 07:41 AM

Thanks donrock, that's some good advice. So, it's the FHA then, and an inexperienced broker. Sounds about right. I'm going to do my best to work this out for my family's sake at least.

**donrock** · 02-02-2009, 10:08 PM

oneofthecrowd,

I don't know what state you're but here in California all you have to do is the initial DRE (Dept of RE) and a lot of the problems get solved in a hurry. If you have a strong one there, the next time you talk to your LO agent tell him you were advised to talk to them and see if that will maybe convince him to get some competent help if he needs it.

Good luck,
donrock

**jamesww** · 02-02-2009, 11:13 PM

First of all there is no problem with using a mortgage broker and they do not have hidden fees in fact they are required by law to be more transparent and to disclose all of their fees. Banks are not regulated to where they have to disclose all of their fees. So your friend is mistaking on those two parts. Next both a bank or a mortgage broker are going to sell your loan in the secondary market. Nearly 75% of all loans get sold in the secondary market.

Don't freak out about your mortgage broker asking for more and more paper work as this is pretty much the case across the boards right now. The L.O. will get told a certain set of documents are needed and then the underwritter will decide that it wasn;t enough. It is just the nature of the market right now. Lenders are gittery. Just ask your mortgage broker to request a complete list of all items the underwritter would like to have on your loan. Then have the broker supply this list to you and provide all the documents. That way you know you have everything in just in case your guy is new.

**stallan54** · 02-03-2009, 05:26 AM

First, LO's and realtors face the same dilemma. During the boom when the industry was easy there were a lot of fast talkers, charging extraordinary commissions and fees, etc... Mortgage brokers are typically the way I buy real estate because as someone else mentioned they simply have more options for loan products and if they charge say 1.5% of the loan amount, it is deserved as there is a lot of work involved ESPECIALLY an FHA loan.

I have found recently LO's are having a hard time understanding FHA as it is virtually a Full Documentation loan. You need to submit everything except for a spinal tap for the loan to be approved. LO's and MB's should have a full list of required docs upfront and send it with the 1003 application so it would reduce the amount of repeated docs you will need to do.

FHA's are very difficult and if you cancel it and go with someone else, you could lose the house, risk losing deposit, appraisal/application fees, etc... Talk to the guy and let him know this is rediculous and tell him to step it up a bit...That's all.

**oneofthecrowd** · 02-04-2009, 08:51 PM

A house full of thanks to all of you. Your feedback has been very reassuring to both me and my family! We're going to "stay in the ring" till the end. The home isn't much but it's within our price range and as close to the neighborhood where we want to live as we can get. We're hard working people so, this housing crisis has opened a way for us to have a chance to afford to buy something we thought we'd never ever have.