A mortgage lender offering the lowest possible prices and the best possible service may nevertheless struggle to establish a market presence.

Invitation to Mortgage Lenders Who “Dare to Compare”

August 21, 2021

A mortgage lender offering the lowest possible prices and the best possible service may nevertheless struggle to establish a market presence. The problem is that the typical prospective borrower doesn’t understand mortgages very well, may be baffled by the complexity of mortgage pricing, and by the multiple options that mortgages offer.   With prices changing every day and little opportunity to learn the ropes from multiple transactions, shopping is a daunting process. Trying to compare the prices posted on lender web sites is an exercise in futility because no two of them provide price data in the same way, and some provide no pricing at all.

The result is that many if not most borrowers don’t even try to shop, selecting the lender recommended by their broker or friend, or the one whose advertisement captured their eye. The selection may be a good one, or it may be a bad one. They are gambling that they won’t be victimized by any of these common market hazards:

  • Low-Balling: Luring borrowers with impossibly-low price quotes, raising the price after they are hooked.
  • Mispricing: Basing a price quote on assumed low-risk transaction features rather than the actual features of the transaction.
  • Incomplete Pricing: Quoting the price as rate and points alone, ignoring fixed-dollar lender fees.
  • Lapsed Pricing: Retaining undated lapsed prices on web sites when they are more favorable than live prices.
  • Name-Lender Price Premium: The extra charge levied by the largest and best –known mortgage lenders for the privilege of dealing with them.
  • Lock Abuse: Raising the price on the lock day on the pretext that it is a market adjustment.

How can a mortgage lender without a name reputation, who doesn’t engage in any of these abusive practices, succeed in the marketplace? By becoming a Certified Network Lender (CNL) on www.mtgprofessor.com. CNLs report their prices and qualification requirements to my web site every morning, just as they do with their own loan officers. The site offers prospective borrowers the following:

  • Competitive Prices: CNLs know that their prices are being compared to those of other CNLs.

  • Support on Critical Decisions: Major ones are the type of mortgage, and the combination of interest rate and points. Users can base these decisions on simulations of costs, over a future period specified by the user.

  • Decision Aid Simulations: Borrowers can assess how a different down payment will affect their future costs. They can do the same with the lock period and the escrow decision.

  • Easy Updates and Price Monitoring: Since interest rates are reset every morning, shoppers who shop on the site can refresh it every day, even after selecting a lender, until the lender selected locks the price.

There is no charge for becoming a CNL, I am financing it from other sources. My target is 10 lenders, I already have 3.

Lenders who are interesting in becoming a CNL can email Jack Guttentag at jguttentag@mtgprofessor.com

 

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