Customer Service in Today's Mortgage World

If you have participated in a mortgage transaction
in the last year, you probably found it to be a
frustrating experienced.

I know that those of us with long mortgage careers
have found it to be particularly annoying. In my
32 years of doing home loans, I don't think I have
ever seen the overall service in our industry drop
to this level before.

The mortgage business is not simple. But it can
be made easier to navigate when you get all of the
service providers pulling in the same direction. A
seasoned professional can make it look simple when
they have a team of service-oriented professional
seach doing their job, and being mindful that there
is always a client who has a need that must be met.

Let me go through a typical transaction to give you
an idea of what is going on today.

THE CLIENT: You have a goal or a need. You want to
purchase a home with financing, or want to refinance
your existing loan to take advantage of lower rates,
or availability of equity, or both. You use your
past experience or network of acquaintances to find a
loan originator to help you.

THE LOAN ORIGINATOR: This is my role. I succeed by
cultivating and maintaining a relationship business.
I want to be and need to be responsive to your requests
and questions. I need to have an understanding of what
loan programs are available, what it takes for a client
to qualify for them, and how to adapt your personal
qualifications to the lender's underwriting guidelines.

I need to be able to anticipate any problems, help you
brainstorm solutions, and make appropriate suggestions
as to what I think will be the best solution for you
based on your risk tolerance, time horizons, and quali-
fications.

THE LOAN PROCESSING STAFF: To put a face on it, this
would be my assistant and support staff in our loan office.
She works with me (and several other loan originators) to
facilitate the paperwork for presentation to the lender.

She and I work closely together, sharing information
about your particular circumstances and details about
the proposed lender's guidelines. We each bring to
the other's attention new information that we have
received about loan program changes so that we can
make the most efficient and thorough case for you that
we possibly can.

We are both on the same page about providing the best
possible service that we can to you, the client. Very
rarely is there a customer service breakdown at this
level, and when there is we make sure we correct it
quickly.


THE LENDER: This is where the customer service disconnect
begins. The lenders have been inundated with loan
requests. They have been slow or unable to hire sufficient
qualified staff to move the loan request through the
pipeline efficiently.

Add to this bottleneck the reality that lenders are coming
out of a troubled lending environment. Many bad
loans were created when underwriting was very lax, and
as far as the pendulum had swung toward laxity, it now
has swung the other direction to rigid enforcement of
guidelines. The lenders are very nervous about making
mistakes when approving loans.

We have even had some of our lenders tell us that every
loan needs to be reviewed by a senior underwriter. This
puts the entire pipeline through the eye of a needle!

It also creates the situation where we receive written
loan approval by the underwriter, and make plans with
you to finalize the paperwork that has been requested.
Then, a day or two later, we get an updated approval
that asks for additional paperwork, or expressing a
concern that we were not originally aware of. It is
always troubling to have to ask the client for more
last-minute paperwork, or to back-pedal on what we
thought was a solid loan approval.

Government regulations have not helped either. Since
May, we have had a new appraisal system that was
dictated to us by way of FNMA and FHLMC, the Attorney
General of New York. The lenders have been doing their
best to give us reliable procedures to follow. But they
have bank regulators looking over their shoulders, and
because they are concerned about being compliant, every-
thing has been moving more slowly. And the supportive
team that included competent service-oriented appraisers
has been dismantled and replaced with a panel of
appraisers with various levels of qualifications and who
have no commitment to me to perform with the care that
you deserve.

A big part of my professional approach to creating loans
for you was to have a network of representatives from
my roster of lenders with whom I could discuss your loan
file and make sure that what I was proposing was do-able
with them. This allowed me to get reliable answers at the
inception of the transaction and help you have a clear idea
of what to expect.

In today's environment, even my lender representatives
are gun-shy about offering opinions that won't be countered
when the file reaches the underwriter (or review under-
writer!). The typical answer I get now is "Just submit
the file and the underwriter will tell you if it will
work or not".

Before all of the bad loans came to light, the lenders
were very nurturing of their relationship with us loan
originators. Now that they are buried with business,
extremely conservative, nervous about the regulators,
and unsure of how to comply with the new requirements,
their focus is to have a file that leads them to a defensible
decision, whether that is an approval or adecline. So,
they put much less value on providingservice than they
do on covering their 'bases'.

Doing business in this manner is contrary to how I
have built my business. I don't like not having
answers for my clients, or to feel like we are just
twisting in the wind while we await a decision from
the underwriters.
I do appreciate those of you who have maintained confidence
in my services. I hope you know that I have not changed
my approach to business, but things have radically changed
behind the scenes. I make mistakes, but I do everything
I can to rectify them as quickly as possible, and your
interests are always in the forefront of my mind.