The merits of an individual loan officer far outweigh the identity of his or her firm when it comes to choosing a new LO with whom to work, writes the Mortgage Professor Jack Guttentag in a recent column.
That’s because a loan officer will be responsible for his or her own price integrity and quality decision support, which don’t necessarily come by choosing a firm.
“The problem is that the typical borrower has no reliable way of determining which LOs do well in providing these services, and which don’t,” Guttentag writes.
Guttentag says he is working on developing a certification process for LOs, but in the meantime, details the considerations that will come into play for that process.
For example, when it comes to posted prices, the borrower needs access to the same posted prices the originator sees, he says.
“Mortgage prices have integrity only if they are the lender’s “posted prices” — those at which the lender is actually prepared to lend at the indicated point in time. Lenders distribute their posted prices every day to all LO employees through a variety of electronic systems. Borrowers seldom have access to these systems.”
The LO’s integrity also extends to decision support, or making a decision that is in the best interest of the borrower’s needs.
“Decision support means that the LO offers expert counsel to the borrower on the type of mortgage, and the combination of interest rate and upfront fees on that mortgage type, that best meets the borrower’s needs,” Guttentag writes. “These decisions, which can have very important consequences for the borrower in future years, are often made in haste, subject to bias or questionable rules of thumb, with little or no consideration of alternatives.”
The Mortgage Professor further details these different decision-making factors in his column. Read it here.
Written by Elizabeth Ecker