Story

Asked a lender how he actually gets paid, so he turned the monitor around

I've been at this maybe four months and mostly I go to open houses to hear people talk. There was a lender guy at the table with a bowl of candy and a stack of business cards nobody was taking. I asked him how he actually gets paid, which I expected to be rude, and he said hang on, spun his laptop toward me, and pulled up a scenario.

He showed me the same loan two ways. One where the lender pays him and his fee sits inside the rate, and one where I'd pay him at closing and the rate comes down. Same loan, two shapes. He said his compensation percentage is set at his company and he can't change it deal by deal, so the way anybody could game this is by steering you to a lender who pays more, which is exactly what the rules are written to stop.

Then he did the part I didn't expect. He put three lenders side by side on my rough numbers, pointed at the one that would pay his shop the most, and said that one isn't where I'd send you, and then told me why. Slower underwriting, and their appraisal panel in this county is a mess.

I have no idea if this is normal behavior or if I met an unusually straight guy on an unusually slow Sunday. It was the first time anybody in real estate has shown me their own math without me having to pry it out.

11 replies

tylerbrooks9PassivePRO5

Take the card. Seriously. That's a person worth having a phone number for even if you don't buy for two years.

diane_kowalskiPassivePRO9

The appraisal panel comment is the detail I'd hold onto. That's local knowledge and it doesn't show up on any comparison site.

aliyah_bAU2APRO6

Did he show you what the two shapes cost over the time you'd actually hold it? Lower rate with money at the table is a good deal or a bad one depending entirely on how long you keep the loan, and four months in I wouldn't have known to ask that either.

jordan_ellis2ActivePRO6

I've read for six months and still haven't walked up to a lender at an open house. Noting that.

hannah_west29 Get yours

The comp structure you're describing exists because of rules written after 2008 to stop exactly the steering he mentioned, and the specifics of how those apply have kept changing, so get anything he told you confirmed in writing on the actual disclosures for your actual loan. The demo was honest. The demo is also not a document.

gregpowell66AG4BPRO8

ledger's right about the paper but I'd still rather have the guy who does the demo than the guy who doesn't.

joe_delgado5AP4CPRO6

Normal enough. Every broker I've worked with will do this if asked and most won't do it unasked. You just asked earlier than most people do.

carlos_nunezActive

Going to be the sour one. Turning the monitor around is a sales move and a good one. It buys you trust in ninety seconds and it costs him nothing because everything he showed you is on the disclosures anyway. Doesn't make him a liar. Just don't confuse candor about fees with competence at closing, those are separate skills and I've met people with one and not the other.

marcus_hale41CG4A

quarry's point stands, and it doesn't cancel out what you said. I'd ask him for two borrowers who closed with him in the last ninety days and call them. Costs an afternoon.

devon_pierce Get yoursPRO5

Adding lender at open house to the list of people I'm supposed to talk to. The list is getting long.

luis_carrera Get yours

I've had this exact conversation with two brokers and analyzed it into the ground and bought nothing. rigging asked one question at a candy bowl and got further. Working on that.