This may be a rant or a general statement, but I am concerned about the public perception that they can get bottom basement rates, and throw in the catch phrases "no points, no closing costs".  Let's be real people.  LOANS COST MONEY, and yes you did pay closing costs when you bought or refinanced the last time...I hear that one all the time.  Get out your old HUD-1 and I will show you.

I am getting a little tired of convincing people that we don't work for free, and with rates dropping it seems borrowers keep asking for more.  I am a licensed mortgage professional, and we ALL have to be licensed by the end of the year, and THEN get a NEW license from the Feds.  We pay a lot of money to be allowed to talk to you now thanks to Barney Frank.  In some ways I am glad for the licensing.  It will weed out the bad eggs, and ensure the professionalism of our business.  Bottom line to borrowers in the future...back off the no point no fee talk.  We earn our money, and the brokers left in the business are very educated and extensively licensed.  

My loans are very competitively priced.  Our company has some of the best pricing in the industry due to our lender relationships and lock pull through.  Typically 1-1.5% of the loan to the broker is an adequate fee not including third party charges.  That can also be paid "in the back end" from the lender to keep your loan amount to a minimum.  I have been offering some of the best deals for rate/payment/cost that I have ever offered in my entire career....but I still keep hearing "FEES FEES FEES".  Even when I offer no point/origination all YSP loans!  You don't even pay costs out of pocket...they are in your loan.  Keep in mind that real estate agents make 3-6% of a sale, and don't do as much of the dirty work as we do.  We save you money, fix your rate, give you cash, and many more benefits. 

I am also tired of my colleagues who send out bogus Good Faith Estimates with extremely underdisclosed fees.  To borrowers....a GFE is not a real loan committment!  Just because it is in writing, doesn't mean that is the real deal.  You Quicken Loans, Amerisave people and shady independent brokers...your time is limited.  You are only hurting our industry and distorting public perception.  With GFE 2010 coming and licensing, hopefully you guys will be leaving this business.   

So bottom line to borrowers....we offer great deals, and you will shop yourself out of this market if you keep harping on fees.  I see it all the time....borrowers come back to me after I tell them a GFE from Quicken, Amerisave, etc etc is a lie....and it ends up being a lie.  Then they can't qualify or get the rate offered that day because rates went up, program guidelines changed, etc etc.  Don't let it happen to you. 

Questions, comments folks?

One thing I try to do is to offer clients three options when we first talk. I include a "no cost" option, a "low cost" option, and one in which the client pays a couple of points. I use Mortgage Coach software to put this together. This really provides an excellent total cost breakdown over a specified amount of time so that they can make the best decision for their situation.

If you try to structure every deal the same way (a point upfront plus 3rd party) you are bound to lose a segment of the market who loves the idea of a little higher rate and no costs, as crazy as it may seem to you and I. So when you talk to borrowers just explain right off the bat that you don't have a specific rate and cost program. Let them know that you have three different options for each client and try to get these numbers infront of them asap. In many cases I find that they quit shopping the competition and start shopping for the best choice within the numbers you provide.

One thing you have to understand is that there are a ton of competitors offering low cost and fairly low margin deals, so you have to really do a good job of educating folks about why they should choose you.

In regards to Quicken and some of the other mega brokers/lenders, I have found them to be priced way out of the market for your savvy borrowers in both cost and rate. But because they have such a solid mass marketing approach these cost and rate sensitive borrowers are probably not their target market.

By the way...for anybody who is interested I highly recomend Mortgage Coach. It has certainly won me enough deals to pay for itself many times over and I feel like it adds to your ability to really educate clients as well as providing that extra layer of credibility that is becoming more and more important in what I call a "trust driven" market.

Thanks for the reply.  The issue that I seem to come across is a general public idea that they really do think they deserve a free loan.  I offer them the 3 options, and our pricing is the best out there....yet I still hear, "Your costs are too high", etc etc.  Yet someone from Amerisave will send a clearly BULLCRAP GFE to them, and they love it because "in writing" it seems so cheap, and I am trying to kill them in fees...that are mostly 3rd party anyway. 

You are right about Amerisave/Quicken being priced out.  However, that doesn't meant they won't send out a GFE that is rosy as anything, collect that $500 upfront non-refundable fee, then change all the terms to their crappy retail pricing.  That is their MO.  I try and tell borrowers that, but like I said...some folks like to be lied to. 

I know it is my job to convince borrowers, and I do my best.  I win a lot of battles, but I like to win them all! =)  I point them to third party sites like Ripoffreport.com and other sites.  But it amazes me how little average homeowners know about the loan process and how much it costs.  Such is the nature of the business.  I hope GFE 2010 will chase all the rest of the shady bait and switchers out of the market.  That is fine by me!

Most borrowers don't even understand the broker/underwriter relationship.

They want a free loan because they think you make your money off the interest rate over time.  From that perspective, any additional fees to broker the loan make them think its too expensive.

Hi there! My name is Kelly and I work at Quicken Loans. I just wanted to reply quickly from our standpoint since you mentioned us.

While I'm sorry there appears to be some negative opinions about us, please understand that we operate in the same exact market with the same conditions - including licensing, rates, client mindset, etc.

We can all admit the changes in the mortgage market over the last few years have been challenging. At Quicken Loans, we feel it has made for a more educated client. Clients ask questions and are more than deserving of answers in regards to all fees and why their loan costs what it does. It's part of what we do as lenders - help clients get the right loan and also make sure they understand their mortgage. Agreed?

We do our best to honor every GFE we give out. All lenders (direct or broker) know that declining home values don't make it easy. The best we can do is just the same as you - order an appraisal and process the loan. We try to make it clear that a GFE is just that - a good faith estimate. It is our most educated and truthful estimate as to what a client's loan will cost.

We're eagerly looking forward to the 2010 GFE. The changes are welcome - it'll make for more informed clients and help to keep all lenders on the same level. We definitely won't be "leaving the business" like you hope for. 25 years of helping America with their mortgages has taught us a thing or two about making clients happy and remaining the nation's largest online lender.

Best of luck to you. If you ever have any questions or there's anything I can help with, feel free to contact me directly - Kelly@QuickenLoans.com

Thanks.

Kelly

Kelly,

What you say on here is one thing...however pages upon pages of RipoffReport.com say a different story.  The biggest MO Quicken was famous for was the unrefundable $1,000 fee.  Kept borrowers from really shopping.  However, MDIA got rid of all that, and now they are keeping you honest.  I would say Amerisave, EZZFinancial, and small little broker shops with little wholesale lender support are the biggest bait and switchers. 

Kelly is a paid advocate to dispute negative online comments about the predatory and deceptive practices of Quicken Mortgage.