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March 24, 2007
Tell us you make a million
Drawing from some of yesterday’s discussion regarding whether or not Casey Serin is criminally liable for his actions, I thought I should share what happened to me a few weeks ago.
Having already detailed my ridiculous experience with Quickenloans, as well as lightly touching on the hell that was dealing with Countrywide, I can affirmatively declare that the behavior of lenders in this country is beyond unethical, it is outright corrupt.
Consider the following: A few weeks ago my wife and I happened upon a condo here in Utah that we stood a good chance to win (it was being auctioned) for $61,000. As we would need to close quickly, we called some lenders to see what could be done for us.
My wife called Well’s Fargo Bank and was quoted an amazing 6.25% rate for a 100% financed No Doc 30 year loan with NO POINTS. I was shocked and skeptical when she told me this, as 6.25% is a difficult rate for ANYONE to get in this current market. The loan agent she talked with had encouraged her to provide her credit information and get the ball rolling on the amazing rate he had quoted. Having already had several lenders try to screw us, she and I have both learned to carefully examine a lender before committing.
As things were going well with the auction, I proceeded to call Wells Fargo and provide the same information which my wife had provided. To my surprise, I was quoted a similar rate of 6.25%, however this time with one point. This is hilariously common practice for lenders. You could call Wells Fargo all day long and get quoted a DIFFERENT RATE with each loan officer you talk to. The only consistency will be that EVERY rate quoted will be LOWER than what the underwriter will actually approve.
Still, we had both been quoted 6.25%, which even with a point would be a deal, so I called Wells Fargo for the third time that day and decided to try and lock the rate. I began talking and explaining once again, the kind of loan which my wife and I desired and was quoted a rate of 6.75% with two points. I politely explained that I had been quoted a lower rate earlier during the day, to which the loan agent replied: “Sir, our rates are standard, they do not change and every agent will give you the same quote (ya…right).
Still, this rate was appealing so I asked him to fax me a lock so I could guarantee the rate. He happily agreed to do so if I provided my social and credit card number. I said that that would not be a problem, but that I’d just like to review the details of what was being proposed first.
To confirm I restated what he had already told me several times in our conversation:
“So just to be clear, Wells Fargo is able to give me a 6.75 rate on a no document loan with 100% financing, at two points, for thirty years?”
“He coughed…then said, actually sir, I just checked, the rate would be 8.75%.”
I smiled…predatory lending at it’s best.
“Ok, so you were mistaken then, the rate is 8.75% for a no document” I continued
“Stated income” he interrupted.
“But I clearly said we wanted to do a No doc loan remember?”
“Sir, why would you not want to do a stated income instead? It’s the same thing, you just tell us whatever you want and we use that number to qualify your debt to income…”
“I am self employed and my income is not steady, I do not have a set monthly income and that’s why I was asking for a no-doc loan” I explained for the third time that call.
“Well sir that’s not a problem. You can say anything for your stated income, you could say a million dollars haha…it doesn’t matter.
I insisted that it DID matter, in retrospect I really wish I had confronted him more for TELLING ME TO LIE on my loan application. I then asked what the No Doc rate would be.
He replied that it was the SAME as the stated income rate.
To make a ridiculously long phone call slightly shorter, I will summarize. I painstakingly spelled out the terms which he had quoted me and in the end found that he had actually been quoting the ARM rate and not a thirty year one.
The man was beyond mistaken. He was deliberately lying in an attempt to get his commission. That is the primary issue with lenders in the finance industry. Many of them work for commissions. As such, they have learned that they can often get away with illegally doing whatever it takes to screw the client.
Before attacking someone like Casey for lying on a loan application, realize that the system is set up not only to encourage and permit sleazy loans, it often FORCES someone into them. Imagine a company that encouraged employees to tell their customer to go ahead and steal from the company. Not only encouraged, but paid commissions to the employees who successfully tricked/persuaded/convinced customers into stealing. Honestly, the only thing that saved me from being convinced to do a stated income loan was the fact that this has happened to me SEVERAL times already, otherwise I could easily have been persuaded to have overinflated my income. Why else would the loan officer tell me to? He does work for the company after all, and is generally the ONLY human contact between the lender that clients have. So before you criticize anyone, remember people like Casey are the symptom, not the cause.
read comments (8)
March 29th, 2007 at 11:10 pm
This is exactly why a lot of the commentors are off base in the last post. People don’t understand that Casey wasn’t stealing from the mortgage company. The mortgage companies expect people to lie when they do stated income. You know it - they TOLD you to lie. That’s why, like I commented in the last post, people are charged a higher rate for stated income. The mortgage companies don’t actually believe they are making as much as they state.
April 10th, 2007 at 5:45 pm
I completely agree Gregg. If the mortgage company believed the stated income claim, they wouldn’t be charging such a premium for the sub-prime loan.
April 24th, 2007 at 9:06 pm
[…] Realty Pupil - Exposing Real Estate Blog Archive Wells Fargo Wells Fargo Mortgage Company Told Me To Lie. 03.24.2007 | 3:23 am | Financing. Tell us you make a million . Drawing from some of yesterday s discussion regarding whether or not Casey Serin is […]
July 3rd, 2007 at 5:51 pm
Nice try, but Casey already admitted that he couldn’t care less what % his loans were. He bought a few houses hoping for a quick flip, and when that didn’t pan out, he acquired more for the sole purpose of getting cashback to float the existing properties. The kid is a crook and was hoping for a quick buck. Predatory lending had nothing to do with it.
July 3rd, 2007 at 9:07 pm
First of all, you were probably quoted different rates based on different programs. You have to caompare apples to apples.
Second, if you need 100% financing, you cannot afford it. I don’t care what you claim your income is, if you can afford the property, ante up at least 20% to show good faith. Besides, you will get a better rate if you do. Lenders that provide 100% loans are desperate fools. Seek out another lender.
Third,I don’t think you have a clue what you are talking about in terms of the loan officer’s compensation. For instance, you claim “He was deliberately lying in an attempt to get his commission.” Can you prove that a bank with a Federal Charter, such as Well Fargo, or BofA, is paying commissions to lending officers? I think not.
July 24th, 2007 at 9:18 pm
You are clue less of course loan officer’s earn commission. They get a draw not a salary and if you don’t cover your draw you are in the hole and get let go! Plus there are layers of people that get a cut from the loan officer’s commission. You have a divisional manager an area manager, a sales manager a branch manager and the loan officer that get a cut from the commission. Welcome to reality!
September 30th, 2007 at 7:06 am
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October 3rd, 2007 at 11:06 pm
[…] Fargo Mortgage, the nation’s second largest mortgage company, and one with a spotty past, has announced that they will no longer be permitting third-party brokers to issue subprime […]