A recent observation is that mortgage “bankers” and “traditional retail banks” tour Realtor offices and other venues touting that they are somehow better than mortgage brokers at providing the funds needed to purchase a home. (Black Diamond Mortgage Corporation is proud to be the experts in real estate finance, and a mortgage brokerage to the core!)
So we have decided to list the traditional talking points and BUST THE MYTH’s!
Myth #1 (BUSTED!) – Mortgage Banks are more lenient than Mortgage Brokers, because they are loaning their own money.
Fact: Black Diamond Mortgage provides more options and more expansive loan offerings than any one banker can.
– If you had your own money to lend, would you take more or less risk with it? LESS, of course! So the only way to provide more options than you would offer with your own money, is to have the option of using other people’s money that would take more risk than you.
– Mortgage brokers can literally present a loan to a 2nd, 3rd or 4th wholesale bank (when necessary) as a brand new loan, with a brand new underwriter, with the broker learning from each lender’s response, and insuring the best presentation with the most likely approval possible.
– Mortgage brokers are not limited to the opinion of one underwriter, Many mortgage bankers with their own underwriter’s “cannot walk back” a loan situation that may not have benefited their client, and could have been presented differently.
Myth #2 (BUSTED!) – Mortgage Banks can “get things done” easier, because they have direct underwriting access.
Fact: Black Diamond Mortgage staff are better trained in going to the source for facts, and with today’s technology, if an underwriter has a phone (all of them do), then they are equally accessible to bankers and brokers.
– Most loans offered are using Fannie Mae, Freddie Mac, VA, USDA or FHA guidelines. These guidelines are used by underwriters to approve loans. Even a client can look up the rules and push an issue with an underwriter when needed.
– Because mortgage brokers have access to multiple lenders and underwriters, they have more than one opinion to draw from whenever there is a question about underwriting guidelines.
– A mortgage banker is limited to the opinion of the underwriters and policies of the bank they work for. These opinions do vary and often there are differing conservative v. liberal policies, so the only way to offer the most expansive approvals is to have more options.
Myth #3 (BUSTED!) – Mortgage Banks can offer better interest rates / loan pricing.
Fact: Black Diamond Mortgage will obtain loans from wholesaler mortgage banks that are MUCH larger than any individual mortgage bank or retailer….think BUYING POWER! – COSTCO!
– Mortgage brokers can shop loans with several wholesale banks in seconds, often identifying pricing disparities of up to 0.25% on the interest rate or cost savings of thousands of dollars!
– Mortgage brokers offer the lender paid compensation model, where the borrower pays the mortgage broker NOTHING, and the entire compensation comes from the wholesale lender.
Myth #4 (BUSTED!) – Mortgage banks fund the loan in their name, and this is better for the client.
Fact: Black Diamond Mortgage funds mortgages in the name of the lender actually collecting the mortgage payments on the future loan and do not “act like they funded the loan” only to sell it a few days later for servicing.
– The majority of all loans backed by Fannie Mae, Freddie Mac, VA, USDA or FHA are sold at least one time during the life of the loan.
– Having the loan close in the name of the first bank to plan on collecting payments, eliminates the confusion of a sale being completed right after the client closes (this is the practice at many “Mortgage Banks”).
– Many clients at mortgage banks complain about their loan being sold, shortly after closing.
Myth #5 (BUSTED!) – Mortgage banks have “in-house” or portfolio loans, and Mortgage Brokers do not have them.
Fact: Black Diamond Mortgage Corporation offers loans that are unique from several banks, credit unions, and wholesale lenders, all designed to meet niche needs in the lending universe.
– We have Lenders that lend to foreign nationals who live abroad, offer commercial loan underwriting for residential purchases, and is a retail bank offering unique lending options to mortgage brokers for clients.
– Some of our Lenders and other partners of ours offer “NON-QM,” “Bank Statement Only Programs” and other unique options.
– Another Lender, offers 1xClose Construction loans with no money down.
– And another one of our Lenders offers conventional and FHA renovation mortgages with the 1xClose Construction Options.
Myth #6 (BUSTED!) – Mortgage banks are local / personal, mortgage brokers do not know or care about you.
Fact: Black Diamond Mortgage employs many who live in the community that we serve, own homes funded by Black Diamond Mortgage.
– Clients obtaining the loan at Black Diamond Mortgage will be supported by the loan officer, the operations manager and our “Coordinateur de L’Experience Gentile” … all local and very interested in your success.
– Our investors use regional employees as well….many employed in Montana, Idaho and Washington.
Myth #7 (BUSTED!) – Mortgage banks are faster than mortgage brokers
Fact: Black Diamond Mortgage operates very fast, with resources much larger than our own company, and the ability to offer the fastest interpretation of new TRID closing laws.
Non-Myth #8 (MYTH NOT BUSTED– TOTALLY TRUE) – Bankers are “stiff”, a little too good than the rest of us….
Fact: Black Diamond Mortgage staff are laid back, our dogs come to the office, and you can pick up a company labeled beer coosie or ski strap when you come by to hang out….
Stop by a mortgage broker like Black Diamond Mortgage, and see the difference for yourself!