October 15, 2018
I wanted to drop a quick note and tell you about my recent experience with a mortgage lender that you have definitely heard of (they advertise A LOT on TV, radio, and internet banner ads). I don’t want to say their name for fear of legal reprisals, so let’s just call them “Saturn5Lending”.
In short, if real “rockets” moved at the speed of the process I endured, Apollo 11 would have never achieved escape velocity. I thought it would be as easy as putting all necessary information into their online application system, allowing them to pull my credit, and then they would send me a loan estimate via email.
Boy, howdy, was I wrong!
What was it like? Well, it was about like sitting through a time share presentation while you’re on vacation. But not one that you’re interested in; rather, one that you sit through just so you can get the free parasailing trip. But there was no parasailing trip at the end of this ordeal.
It is probably not fair to compare Saturn5Lending’s process to Highlander Mortgage’s process. We are, arguably, one of the easiest mortgage companies to deal with. However, the impression you get from Saturn5Lending’s advertising, you would think that getting a loan estimate is salesman-free and super-easy.
You would be wrong.
Instead, it took every ounce of professional knowledge I possess to resist the hard sell that their representative (who, by the way, does NOT appear to be a licensed loan officer) put on me. I never did get a written loan estimate, despite giving him every piece of information he could possibly need in order to give me one! He gave me some verbal quotes, which were not at all competitive. When I told him I was going to shop around and get back to him, he was incredulous. Like most salesmen who employ the hard-sell technique, the last thing he wanted was for me to get off the phone without committing. I actually got suckered in to allowing him to call me back twice, and he kept promising me a loan estimate but never did send me one. Not a pleasant experience at all. 45 minutes of my life I will never get back.
The rates he gave were decent, but the costs for those rates were astronomical (to keep with the NASA motif). Clearly, their sales reps are used to people who only look at rate and/or payment and ignore closing costs. This is where my experience in the business comes into play. I, as a seasoned loan officer, understand that rate is only half the equation. You HAVE to look at closing costs as well. For a $350,000 mortgage, which was the working scenario, the closing costs for a loan from me would be about $4000 lower! And by the way, I am comparing a Highlander offer to their “I just talked to my manager” offer! So they were even more expensive with their initial quote!
Also, their representative misled me and told me that only Saturn5Lending can offer a “recast” of the loan, which is absolutely false. Virtually EVERY servicer of Fannie Mae or Freddie Mac loans offers this option. When I told him I had done one in the past, he said usually lenders charge “thousands of dollars” for this. Actually, they charge around $200. Maybe he meant to say “pesos”.
Another “service” they offer, which the sales rep was very excited to tell me about, was their process of constantly reviewing their customers loans to see how they can “save” them money by refinancing. As anyone who has asked me about refinancing knows, I have very strict rules about whether someone should refinance. It HAS to make sense from both a rate AND a closing cost standpoint for me to get on board with it. Given how pushy their sales reps are, and how keen they are to get you to ignore their closing costs, I can only imagine how many their customers have wasted money by needlessly refinancing.
I knew Saturn5Lending would be a lot more expensive than Highlander. The really surprising thing to me was how pushy they were, and how difficult it was (meaning, impossible) to get a written estimate! Essentially, their online application process is just a ruse to get you on the phone with a salesman who will “close the deal”.