Mortgage Brokers Need To Shut Up

Posted by: Brian Brady on September 1st, 2009

Mortgage brokers need to stop complaining because customers think we have something to hide.

mortgage-brokers-shut-upForget how non-disclosure of yield spread premium gives direct lenders an advantage; the consumer thinks you’re trying to hide something.

Don’t complain about the Home Valuation Code of Conduct interfering with the transaction; the consumer thinks it gives her an unbiased valuation of the property she’s buying.

Definitely stop complaining about the new truth-in-lending disclosure law (enacted last month); ‘ consumers want to know what their rate and fees might be and how they change… immediately, when it happens.

NEVER complain about how lenders favor their retail sales forces over their wholesale channels; the consumer thinks the banks give better service when they read that.

Who cares if bank sales representatives don’t have to be individually licensed?  Consumer might and that gives us an opportunity.

Don’t even THINK about complaining about the new good-faith-estimate (due next year).  That document is one of the best sales tools I’ve ever seen.  An originator who explains that disclosure document properly, wins the loan engagement.  The consumer won’t even THINK about filling out the last page because he trusts YOU.

Shut up mortgage brokers…shut up…SHUT UP !!!  Rather use these goofy regulations as a selling opportunity:

Mortgage brokers are the only fighting chance a borrower has at getting a fiduciary relationship.  We fully disclose our COMPLETE compensation, up front, re-disclose it any time the loan terms might change, and disclose every bit of profit we make on a loan transaction.  Banks and direct lenders engage in secret profiteering, like Vegas taxicab drivers headed to a strip club.

Explain how HVCC was implemented because of the unholy alliances banks had with their appraisers and that you, an independent mortgage broker, will protect the buyer by using an independent appraisal management firm rather than to let the bank use an in-house appraiser.

Beat the three day disclosure period and require signatures on the initial GFE and TIL, prior to collecting the appraisal fee.  Issue pre-closing disclosures, demand that they be signed, one week prior to the expected signing date. 

Consumers will LOVE the “pre-closing conference call”.

Explain that banks deliberately take extra time on a brokered loan transaction because they know you are able to submit back-up files to another lender. Assure them that the direct lender’s only back-up plan is a decline letter and a referral to …(that’s right)  a mortgage broker.

Use licensing as an implied endorsement, from a regulatory agency, about your expertise.  Point out that banks are exempt because they can’t offer any kind of fiduciary relationship;  their salespeople are beholden to the bank first and the customer second.

Really walk the customer through that new good-faith-estimate.  We started using it now because we think it makes so much sense.  I might even go so far as to include some pictures from the lobby signs, from each of the three big banks, so that my customers can fill out page three….IN FRONT OF ME.  I know I smoke Navy Fed on VA loan rates so what do I have to hide?

Mortgage brokers have to stop all the rhetoric about being the red-headed stepchildren of the mortgage industry and start stressing the obvious benefits of our relationship with the borrower.

We are the superior choice to the banks’ salesmen.  Let’s start talking about THAT.



6 Comments on “Mortgage Brokers Need To Shut Up”


I notarized loan docs last December 2006, now the client is sending ME emails wanting copies of the closing papers. He received everything at closing but says now he has misplaced his copies. I didnt start keeping copies til late November 2007. I gave him the name of the title company. now he’s demanding to see his original mortgage documents (promissory note) right to cancel, ect… I have a feeling this is going to court. i’m glad to see stricter rules coming in to play. We are going to end up in court with this person. I don’t know where the paperwork went, but in two years its disappeared. I was told it was filed in the court house and the court house lost it!

Gainesville Real Estate

Well said Brian! I do feel a little bad for people in our industry in general, I just saw a survey today about public opinion of certain professions – fire fighters were number #1 and real estate brokers and mortgage brokers were at the bottom.

Baltimore Homes

Nice article. I do feel that more regulation is needed in the mortgage industry. However, the new appraisal guidelines were poorly developed and are causing more issues than consumer protection.

Rob McCance

Mortgage professionals have a even bigger image problem than RE professionals. You’re right, they should shut up.

Jason Blackburn

Brian, I love how you take things that the average broker would see as an obstacle and turn into an opportunity. (Maybe that’s why you known as America’s #1 Mortgage Broker.) You get that consumer distrust of the industry as a whole is an opportunity for an individual broker to acknowledge that overall distrust, and use these issues give you an opportunity to build trust and value with this individual borrower. When done properly, this can lead to a raving fan that will be a great referral source down the road. Want me to write a script for you?

Suzie 100 Mortgage

Very well said, great advice for mortgage brokers, well done, it is time for the positives in the mortgage and property industry.

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