Continue Working with This Broker?

**hypnicjerk** · 06-07-2011, 02:22 PM

(I'm sorry for such a long post. I'm just so confused!)

The situation: I first found this loan officer working part-time at a Wells Fargo branch. He told me through e-mail what loan FHA amount my husband and I qualified for. Two other loan officers who crunched the numbers say we qualify for $150,000 less, and I'm more inclined to believe them. However, the only way we could afford a certain house was to go with the higher dubious amount and work with the first loan officer. Before we made the offer on the home, he tells us he's no longer working for Wells Fargo because it was too hard to close deals/loans there. His new business card lists a home mortgage company that has a different legal name. The documents that come out of this company are from a funding group at the same address. He seems to own a funding group with yet another name that also operates out of this same address.

The home seller did not accept our offer, but I'm still tempted to continue using this broker because he's the only one who says we qualify for such a high loan amount and we can look at more expensive houses with it. He hasn't been very helpful throughout the process, though, and I never really trusted him--I only decided to do the offer through him because I figured I had nothing to lose, and if he could actually make it happen, he deserved his commission. Ideally, though, I would like just to use his loan offer and NOT use him as my buyer's agent. But I'm very confused about how the many different companies with which he's associated work. If he'd get a mortgage broker fee for finding me a loan, maybe he'd be more willing to let me work with another buyer's agent. I've asked him for a preapproval letter and he says he'll give me one...but I'm not too confident that he will, at least not without more prodding from me.

I would like to know what everyone's thoughts are with my dealings with this broker. I know I need to ask more questions, but I'm not sure how to do this while still having a shot at using his loan offer. I haven't signed any contracts to work with him exclusively, except one that gives him the exclusive right to sell my home. I'm not obligated to use him as my buyer's agent, right? Do you think if I asked him outright if I could just use his loan offer but with another buyer's agent (a Redfin one, actually), he would agree? Or could he just withhold this magical offer from me (I'm assuming he could and would, seeing as how it's not been officially documented)? If I get a preapproval letter from him, can I just start using it to make offers with another buyer's agent without discussing it with the first agent?

Thanks in advance for your input!

**ByzantineHomes** · 06-08-2011, 07:08 PM

The sheer number of red flags your post raised to me made me reach to make sure my wallet was still intact. I get a bad feeling from this situation. I think he is giving you guys a higher loan amount because he is not being as fastidious as the other brokers are. They have to carry the burden of risk that you will default on your loan. That risk increases with the size of the loan. The more willing someone is to expose themselves to high risk borrowers, the less credibility I personally would attribute to them or their organization. A typical financial institution's bread and butter is making money off loans to reliable borrowers, and you only find risky outliers willing to take on "bad credit" which you may well be if no other institution will offer you a loan for as much.

I think in getting into business with this high risk loan for the broker, you may be exposing yourself to greater and greater risk of overextending yourself on mortgage payments.

I don't know your financial situation or the backing of this broker, so I cannot comment intelligently on everything, but I know a bad feeling when I get one, and I certainly get one from your situation. My advice is to find an out in your contracts.

**hypnicjerk** · 06-10-2011, 12:27 AM

Thank you for your reply! Yes, I have no idea how he is using the same information and top/bottom ratios and qualifying us for a [much] higher loan amount. Yet I think my husband and I are in a unique financial situation that does not plug into max. loan amount calculations well. I have two inherited properties and a large amount in savings (there would be a good amount leftover after we forked over any down payment). We were both in school for a while after I received the inheritance, and he JUST started working (i.e. we just started receiving more than a bit of rent income). This is all to say that our income would not be normally high enough for a jumbo loan, but we believe we wouldn't be overextending ourselves to get one. We monitor our expenses closely as well and could always sell one of the properties if we saw financial trouble ahead. Thus, a 'risky' loan does not seem so bad (except that we might have to deal with sketchy people to get one).

To this end, I am now contemplating trying to get another risky quote elsewhere. I don't know where; perhaps I'll look for a broker advertising "Bad credit? No problem!" or the like.

I hope that's not a terrible idea... I'm getting sick of dealing with this current agent (it takes too long just to get a hold of him!), so I think I'll tell him straight up that if he doesn't give me a preapproval letter, I won't be using his services at all. (The only contract I had with him was one to sell a property, but I only signed this so we could make the first offer contingent on the sale of our place. We don't plan to make offers on other houses that are that expensive and so the contract should expire before we'd truly be in the market to sell.)

**reallyreal** · 06-16-2011, 07:22 AM

I agree with the previous poster, you should seek an alternative. You cannot be assured that everyone else tied to this process is as reliable as you are.

**DreJon** · 06-16-2011, 12:02 PM

The problem is that people only want to hear what they want to hear. Many realtors, lenders, and even title reps will tell you whatever you want to hear to get your business. The idea is if they get you now and get you far enough along the process then you won’t leave them. This is why many agents are going on listing appointments and taking listings at high prices because they know they can just beat the seller up on price later. Note: Go with what makes sense not with what sounds good.