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What you should expect from your Loan Officer


The United States is going thru some very difficult times and much of what we’re suffering thru was either directly or indirectly caused by the residential mortgage industry.  Very culpable in this was the role of the Loan Officer.  Not all Loan Officers are dishonest but a certain percentage of them preyed on potential borrowers and the result was many people getting loans they never qualified for. In turn that has helped precipitate the current Real Estate market woes as well as the tragedy of people losing their homes and destroying their credit.  All the more reason you should know what to expect from your Loan Officer if you decide you’re going to pursue a mortgage of any kind so I’ve put this together in the hope it will give you a little knowledge in deciding who you want to work with the next time you consider doing a mortgage. 

First and foremost you need somebody who is honest and genuinely has your best interest at heart.  How do you do that?  The first thing is how the Loan Officer works with you.  Here are a few things you should be thinking about as you talk to them.

Are they asking you good open questions?  They should be background questions such as “why do you want to refinance?” or “what do you want your loan to do for you?”  Remember if you proceed you need to do a loan which is to your benefit, not the Loan Officers and that comes with good honest research and analysis.  You should be asking about repay time(the time is takes you to recoup your costs for doing the refinance), terms, costs and net savings.  Your Loan Officer should be available to answer any questions you have regarding costs including explaining some significant docs such as the Good Faith Estimate and the Truth in Lending Disclosure Statement to your satisfaction and never should they say “don’t worry about it.”  They’re probably hiding something(perhaps the fact they don’t know the answer) and although every scenario is different a good Loan Officer should be able to admit they don’t know but be willing to get you an answer.  Honesty is what you’re looking for. 

How about explaining the loan process and how it works?  A good Loan Officer is going to want to make sure you’re in compliance with all government regulations such as the Mortgage Disclosure Improvement Act(MDIA) by giving you your disclosures up front and also insure you understand not only the process but what all those forms mean.  Each form has a specific purpose and reason for being reviewed and signed.  By the same token each type of loan can have some specific items in the disclosures as well such as FHA and VA and if they’re not signed on a timely basis it can cause delays in the process.

Is your Loan Officer a true professional?  When you’re searching for a Loan Officer that person needs to handle you professionally with the characteristics aforementioned plus the ability to keep you in the transaction all the way thru it.  How often should they be contacting you?  That varies based on the type of transaction for instance there is more urgency in a purchase transaction than a refinance because of potential penalties if deadlines aren’t met.  Communications is key to keeping everything flowing so it is the responsibility of the Loan Officer to insure that happens.  They should also be explaining changes such as issues that might come up when the file is underwritten, appraisal appointments, needed items and so forth.  Basically you as a borrower need to know what’s going on and not just assume everything is on track.  The way lenders are working these days it’s difficult to get many loans done on a timely basis which is why your Loan Officer should be on top of your loan at all times.  And finally you should never feel like you can’t call that Loan Officer for updates or concerns.

Did your Loan Officer fulfill your needs and expectations?  Many times unrealistic expectations are promised by unscrupulous Loan Officers and people get talked down from what they want or simply forget so be a smart consumer and make sure you bring up what the Loan Officer is doing for you.  The advent of regulations like the MDIA have put a certain amount of pressure to stop some of those practices but I’m sure it still happens.  I will come out with more information regarding the MDIA and other regulations which affect your rights as a borrower.

Having gone thru all this you should have a pretty good idea of the character and hopefully ethics of this Loan Officer because in a lot of cases that will determine what kind of experience you have procuring your mortgage.  Always remember that for the average person their home is usually the largest purchase they make and the person on the other side of the desk is not the one who will be making the payments.  It’s sometimes easy to spend someone else’s money, don’t let them foolishly spend yours.