Is This Mortgage Lender Reputable?
August 19, 2002, Revised November 6, 2006, Reviewed June 3, 2011

"I have been solicited over the phone for refinancing by a company called…, claiming to be a direct lender insured by Fannie Mae. I do not find them on your list. The rates they quoted me were very attractive. How do I go about finding out if I am dealing with a reputable company?"

You are fortunate, because this lender left a clue. Fannie Mae does not insure lenders, and that means that you shouldn’t trust anything else they told you -- especially about interest rates.

There really is no place for someone like you to go to check out a particular loan provider. That’s why they should be selected in the same way as wild mushrooms: identify a few you know are good, and let the rest go. That is what I have tried to do.

One list on my web site consists of Upfront Mortgage Brokers (UMBs) who agree to act as a borrower’s agent in shopping for a loan. These brokers set their fee in advance and pass through the wholesale price from the lender. See Upfront Mortgage Brokers. I have a shorter list of Upfront Mortgage Lenders.

If you don’t want to use one of the UMBs or UMLs, or any of the other internet lenders listed on my web site, and you have no dependable referral sources, you are better off throwing a dart at the yellow pages than responding to a solicitation. While not all loan providers who solicit are rogues, all rogues solicit -- by telephone or internet. Hence, the chances of getting hooked by a rogue are greater if you accept a blind solicitation than if you select a loan provider at random.
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