Buyers today are as confused as the rest of the real estate community when it comes to choosing the right lender. So when they are looking for the best rates, and an online advertisement trumpets, "3.62% fixed rate", well, "Why not?"... When the rates they've been quoted by every local lender are hovering at 5.0%, why not take the plunge? They click the advertisement to a databank somewhere in the United States -- or abroad...

And their purchase just became much more difficult to close. If not impossible.

Loan officers are the point people in a transaction between the client and their Realtor -- and the financial institution lending the money. Purchasing a home is a TEAM EFFORT. Having a local loan officer whom the client can walk into a brick-and-mortar building and speak to face-to-face makes the purchase a personal journey. When speaking to some distant, unemotional voice on the other end of a telephone asking for more and more (and MORE!!) personal information from a buyer... Eventually, it becomes a fiasco. And the buyer is nothing more than a number in their computer. More on that later...

And how does a Realtor deal with an out-of-area lender? Our (already difficult) job just became a disaster. Case in point...

My clients work M-F, 8am-5pm and cannot get away to get information to their lender. So they saw an ad online on a Sunday night, called, and magically got ahold of a "loan consultant" at one of our national "bailout" banks. How convenient! This lender proceeded to send my client a "pre-approval" for the loan amount. Not the purchase price like 99% of the lenders out there, mind you, the LOAN amount.

Let me make this note to buyers: When your Realtor presents an offer to a seller, the seller doesn't typically care how much your loan amount is, they wanna know you can pay what you are offering (the "PURCHASE" price). So when a loan officer gives you a "loan amount" pre-approval, your Realtor now must explain to the seller you're good for the difference, without giving personal information to that seller (i.e. inheritance, sale of house, savings, lottery, whatever) -- be it $5,000 or $100,000 difference. The seller must trust you have the money without an actual statement saying you can pay for the purchase price. Ridiculous requirements for the Realtor representing a buyer.

Back to my story... My clients give me their pre-approval letter for loan amount. We just received acceptance on their offer for a nice house. YAY!! There are two numbers on this extremely unprofessional letter (no letterhead is the first red flag). I call phone number one -- after 10 minutes of "press 1 if you are applying for a loan. Press 2 if you are re-applying for a loan. Press 3 if neither of these apply... (we're a loan in progress, people!!!)", I was frustrated and hung up. Called phone number two -- fax machine. Dang. I called the buyer if they had a different number. They did have a different number and extension. They said "Good luck reaching him. - ha-ha!" I called it. The extension doesn't exist. Dang again. Three numbers. Three dead ends.

So being a resourceful Realtor working hard for my clients, I went online to find this guy's office in Minneapolis, MN. I called that number. It was an automated office directory -- and this guy isn't on the directory. HUH???

At this point I'm getting a little alarmed. I can't reach my clients' own loan officer in which I have an accepted offer on a house! I called the local home mortgage department of the same bank and ask them to look up this loan officer AND the loan number. Neither of them are in the national computer system. OMG!! But the local office gives me a 1-800 number to call -- "And press '0' then '0' again to talk to a live person". Thanks.

I call PHONE NUMBER FIVE. After 5 minutes on hold, I get a live human. They don't have the loan number either -- "But let me put you through to someone who can help you. And ask for a supervisor as it sounds like this is an alarming situation." Thanks again.

PHONE NUMBER SIX. Another 10 minute wait. I reach another human. "Sorry, we're the Refinance Department. But the "Mortgage Origination" department is just across the hall. Let me put you through." Oh, dear Lord.

PHONE NUMBER SEVEN. "Yes. I see your loan number. (FINALLY!!!) And that loan officer is here in my office, let me put you through." OMG!!

PHONE NUMBER EIGHT!!! I get this loan officer (by job description ONLY - not a professional) and explain that I have an accepted offer and need to get the documents to him asap as we've already opened escrow. And I needed a corrected pre-approval letter for the purchase price. He stonewalled me. "Our policy has always been to only approve the loan. We don't care what the purchase price is," this GUY says.

"But I've always gotten a pre-approval for purchase price in over 300 transactions in my career," I say.

"That doesn't matter," he says. "We only send out this letter and that's it."

After 10 VERY frustrating minutes trying to speak intelligently with this guy about how EVERY Realtor in our area presents letters to sellers, the difficulties in trying to explain to a seller my buyers are good for the purchase price, etc. and this is the first time I've ever been stonewalled, he basically blew me off and hung up on me. WTF???

Now, I'm not the most difficult Realtor to deal with. To be honest, I think I'm pretty forgiving. But this just plain ticked me off. Red flags are flapping furiously in the wind!!

I called my clients and told them I have some bad feelings about our distant loan caretaker. And if I'm having difficulty getting a simple LETTER from this guy, how would a bigger problem like "APPRAISED VALUE" go over with him?? Would they mind if I could look around for a LOCAL lending institution for them? They agreed, as long as the local person worked evenings and weekends also. In ONE phone call, I was able to hook them up with the same institution here in Salem. GREAT loan officer. Professional. And willing to give me a pre-approval letter for the PURCHASE price. How easy was that? WHEW!!!...

So my advice, folks... LOOK AROUND for a LOCAL loan officer. If you have special needs (evenings, email only, whatever...), PLEASE use a local lender. There are hundreds willing to work extremely hard for you. Really. It makes the job of your Realtor so much easier if (AND INEVITABLY WHEN!!!) issues in your transaction come up. If there are problems, it is incredibly easy to go into a building and try to solve the problem with a human being. Versus the truly impossible of trying to deal with some voice on a telephone who doesn't give a hoot what your name is (you're truly just a number to them -- and a commission dollar!) or your circumstances -- "You are being kicked out of your apartment in two weeks? You shouldn't have given your notice yet. Your own fault. CLICK." A local person will empathize with your transaction and give you the best they have. The rates will be identical folks. Really. All loan officers have to give you a federally-mandated "Estimate of Good Faith" now. If those numbers are off -- even a little bit -- the lender has legal issues. And if one company is offering SMOKIN' deals, there are probably reasons it probably is too good to be true. Check the fine print of these "phantom" do-gooder lenders. Ever hear of "Countrywide"? Their rates were INCREDIBLE two years ago! Today, they are a non-existent lender.

This is meant to help buyers choose hard-working, local loan brokers and banks willing to work for the clients' best interest, not the bank's pocketbook. If you ever have questions about buying a home in Oregon, please give me a call. As always, I appreciate all referrals. Wishing you my best this weekend! :-) ~~ Bobby