Thursday Thoughts

Mortgage brokers do it better

Dana Anghel By January 25th, 2024 January 25th, 2024 No Comments

I will never work for a big retail name. You’ll never find me taking mortgage loan applications behind the desk of a bank. Most of all, I will never use my client’s trust to push some corporation’s agenda.

You may look at me and judge me to be young, or insufficiently experienced. You may think mortgage brokers don’t have access to better mortgage interest rates or service. Or that they’re not as knowledgeable as they claim to be.

And you would be wrong on all counts.

I started my online mortgage education course while working as a poker dealer/tournament director in Reno, Nevada. I had no banking or finance background. I was fed up with the casino industry, had no close friends or family there, and no good career prospects. It was 2013, and I was 27 years old.

I moved to Utah with the plan to build a new career in the thriving mortgage industry.  The stepping stone was a loan officer assistant position while finalizing my own loan originator license. The lessons I learned there were a bit different than what I had in mind.

My new job wasn’t about getting people into homes or counseling them on loan options. It wasn’t about learning mortgage guidelines, or how interest rates work. My job was about selling. About taking as many applications in as possible. With as little as possible questions asked.

And I’m not good with that – not asking questions.

I got my Utah mortgage originator license shortly after. And it was made clear that I was to stay as a loan officer assistant until I “paid my dues” and earned my place at the big boys table. Except I wasn’t learning anything truly mortgage related. And the more I stuck around, the more I disliked how loans were handled – at least the small glimpses I would get here and there.

My experience there inspired this blog post, and I’ll leave it at that.

So I browsed the KSL jobs section  and met with a local mortgage broker. They took me on as an originator and promised to teach me on the go.

And learn I did.

For those who don’t know, a mortgage broker is a person that takes a loan application, counsels the borrower(s) and then gathers the required documentation. They also match the loan file with a lender that is best suited to approve it and/or offer the best pricing, depending on the end goal. Unlike a bank or a direct lender (who have limited loan products restricted by internal guidelines), a mortgage broker can shop around to locate different loan products or needed exceptions.

At this new job I was paid commission only. It was the beginning of my career, and I didn’t have nearly enough volume. I soon couldn’t afford the office fee I was being charged. Strange enough, the biggest deal breaker was the fact that we had only one loan processor for the entire office. She was great, but she was stressed and overworked. My files were delayed because of this setup, and I was increasingly frustrated.

I got a tip that a branch of a particular mortgage company was hiring. It was a direct lender I was previously signed up with as a mortgage broker, and I knew their wholesale rates. Everything sounded great. They underwrote their own loans and promised speedy service, and no production requirement. So I could keep doing what I was doing but without the office fee and a slightly better commission cut. I was concerned about not having the option to send loans to other lenders, since they wanted everything to stay on their books. But I was assured that they brokered out if needed, and that their in-house underwriters had magic dust.

So I made the switch.

And upon locking my first loan with them, I saw the interest rates.

You see, I still had access to lender rate sheets from my previous mortgage broker setup. And what I was receiving at my new job looked like the real deal, but the pricing was way padded. So I asked why that was, thinking there must be some sort of mistake.

Come to find out that the branch was taking a “cut”, or adding a “surcharge” before the rate sheets were distributed to the loan officers. So I was selling the same loan products as before, except at a higher rate.

I closed my purchase loan with that company. It was on a crazy tight deadline, and they made it happen by pushing my file through at the expense of others. I wrote this blog post on the experience, but I felt mislead. And I knew I didn’t want to sell their loan products at an unjustified higher rate.

I put my Google skills to work, and looked up a list of small local brokers to interview. By now, I already knew what I needed to look for. It was clear to me that large organizations had worse pricing, and no incentive to teach. It was also obvious that one choice is no choice, so direct lenders were out of the question.

After dropping in on two local mortgage brokers I met with Troy Warner at First Class Home Mortgage. And I knew that’s where I wanted to be. No office fee. No production requirement. Freedom to use any lender I wanted and lock the interest rate whenever I wanted. Best of all, I didn’t have to use an in-house processor – I could contract my own.

What did this mean for my clients, and my mortgage origination business?

It meant my files didn’t have to go to the lender that brought over office doughnuts. I could shave weeks of my loan process by using a contracted loan processor that could push things when I needed them pushed. It meant I hit the jackpot of the perfect environment to thrive in.

In a little under one year, I learned most everything I needed to know about how the mortgage industry works. Things that people that have been doing this for 20+ years are still oblivious to.

I’m not a rebel. I wasn’t raised to challenge authority. I don’t have the entitlement mentality. I just refuse to look the other way.

Doing the right thing is never easy, but it will always be rewarding in ways you never imagined. I closed all sort of mortgage loans throughout the past years, and ran into all types of issues. I worked hard on each loan file, and focused on learning rather than selling.

This is my story.

To further stir the pot, read my article on How do mortgage loan officers make money

When you’re ready to start questioning the status quo of big banks and “preferred” direct lenders, I’m an email away. [email protected]  / 801-473-3154.