Choosing a loan agent
I am a real estate salesperson. What this ultimately means is that I can both act as an agent in the buying and selling of real estate and I can also originate loans, including construction loans, rate/term refinances, cash-out refinances, purchase money mortgages, etc. There are tons of licensed real estate salespeople in California, but there are also a bunch of unlicensed agents doing business under a bank’s corporation license. This only comes into play when you’re talking about loans, because all real estate agents must be licensed to sell houses.
I work with some very respectible loan agents (real estate salespeople who originate loans instead of fascilitating the buying and selling of houses), but there are also many less-than-reputable people who handle real estate transactions.
One of the first things a person considering a loan needs to do is research the person giving him the money; California provides a public search engine for this task. Marks show up on real estate agent searches if the person’s license has been suspended or revoked, and warnings are also sometimes placed on licenses. One thing I strongly advise against is doing business through a loan agent without a real estate license. Doing business with someone who is operating with a suspended or revoked license is also asking for trouble. The person can try to plead his case to you, but be very cautious; there are too many good salespeople out there to settle on someone who has bent or broken the law.
Mortgage banks are the companies with all the money. There are small operations running with $50,000,000 bank lines, and there are large banks with seemingly limitless funds (e.g., Chase Manhattan, Countrywide, or Washington Mutual). A loan agent who works for a mortgage broker (a person who operates a mortgage brokerage as a California licensed real estate broker, employing one or more real estate salespeople) will usually have a number of mortgage banks with whom he can work, but most of the time a loan agent working for a larger bank is limited to getting a loan from only his bank. There are exceptions, but for the most part, it’s very limiting.
Loan agents working for mortgage brokers have a lot of flexibility when it comes to figuring out what kind of rate will be best. Unfortunately, sometimes the rate an agent quotes you isn’t always the best rate you can get, but rather the best rate for the agent’s wallet. One thing I have come to realize while working for a mortgage bank is that unlicensed loan agents doing business under another bank’s corporate license will generally eek more money out of a borrower, whereas a licensed loan agent will generally do what’s best for the borrower.
Ask your friends, check the California DRE Web site for licensee information, and run a BBB check on the business with whom you will be working. I have seen people gouge thousands of dollars from borrowers without batting an eye; people do not deserve that kind of treatment.