THE MORTGAGE MENTOR
July 30, 2009
California Home Loans Since 1970
Ditech continues to less than forthright
Saturday, July 18, 2009
Today is Saturday and rates for my current "Direct" lender rate survey were easily gathered on-line except for Ditech who only provides a "example" rate on their website so I called Ditech and was sent directly to Joe.
Joe, apparently, is a loan officer, which is a switch from my previous calls when I had to struggle past a Screener before I could talk to a loan officer. This was encouraging because when you are Ditech any change is likely to be an improvement.
After Joe asked several qualifying questions, I explained that I just wanted to get down to rate and points. Joe paused a moment and then quoted a wide variety of rates: "from 5.25% to 5.75% maybe 6.00% until we know your qualifications". He was told to base his quote on my credit being around 780 and that I was well qualified for Ditech's premium rate.
Joe then gave me a rate of 5.125% and 5.330% APR; when asked about points he said that he could not provide points until I filled out an application. Joe would not budge on this point and I finally, not gently, hung up the phone.
Not trusting the pointless rate squeezed from Joe I returned to Ditech's site to see if I could make sense of their 5.25% "example" rate. I was in luck, as it turned out there was a small-print disclosure below the 5.25% example rate which contained the date 07-16-09, the $250,001 loan amount, APR and 1.425..points. It is also interesting to note the example rate was for loans between $250,001 and $417,000 which meant that the rate for the $175,000 loan I was shopping would be even higher.
Today is Saturday so rates quoted on weekends when financial markets are closed would belong to Friday. The date for the 5.25% example rate on Ditech's site is Thursday July 16th, when most lender's rates were slightly lower than Friday. Lenders often offer tiered pricing with lower rates for higher loan amounts.
While the Ditech example rate was probably understated for a $175,000 loan amount I used it in my rate survey.
So lets examine Ditech's verbal rate quote of 5.125% and 5.330% APR. While Pointless Joe would not give points without an application, it is easy to calculate them at 0.447 based on the $175,000 loan amount I was shopping along with the rate and APR claimed by Pointless Joe.
BUT WAIT... Pointless Joe... say it ain't so. While almost every lender increased their rates on Friday but Ditech's Friday quote was much lower then their published rates on Thursday, July 16th. It appears to me that Ditech’s Pointless Joe was pulling the old Bait and Switch.
The moral of this story is… whenever a seller is unwilling to immediately provide the price of their product or service then there is probably something wrong with the price.
My other point is to avoid any lender that requires you to complete an application before they provide their rates. They can easily provide a qualified rate. The real reason some lenders demand an application before they quote is to stop you from shopping further. These lenders know that borrowers do not want to give out their personal information more than once.
It seems that, based on my experiences today and on June 13th, Ditech's loan officers are well trained to not provide the price of doing business without first extracting all their customer's personal and private information. And that, dear readers, in my opinion, is a load of BS.
Stealth Shopper Strikes Bank of America, Chase and Ditech
Saturday, June 13, 2009
When the purchase of any product is contemplated one of the buyer's first concerns is how much does it cost. It is the question that determines a continuing conversation. Would you make an offer for a home before you knew its price? Why is it then that some lenders will not tell us the cost of their financing before we waste our time giving them all our personal information.
Lets see how three of America's largest "Direct" lenders scored.
Bank of America - scored 6 out of 10
Calling B of A for a FHA loan your Stealth Shopper was assigned to Daniel Fruge. Daniel first explained an application was required to obtain a quote. Once he understood there would be no application until I received a rate quote he responded professionally with rate, fees and APR.
Unfortunately, when I requested a Good Faith Estimate, Daniel would not provide it without an application. This is where B of A lost several of their hard earned professionalism points.
Chase Mortgage - Scored 3 out of 10
Attempting to talk with a Chase loan officer provided your Stealth Shopper with his first challenge. It required three calls to the number on their website 800-873-6577. The first two calls ended with a recorded message explaining my call could not be processed. Gosh, did Chase suspect the calls were from the dreaded Stealth Shopper?After the third attempt I was put through to Joe Brown. I told Joe I was shopping for a FHA loan and during the conversation he asked me three times the amount of my downpayment. Here I lost a little confidence because, in my experience, everyone chooses the minimum which today is 3.5% and Joe should have known that. It seemed I was dealing with an inexperienced loan officer which is really not a good idea when looking for a FHA loan..Joe did not wish to provide a quote without an application but your diligent Stealth Shopper finally squeezed from Joe a range of FHA interest rates from 5.5% to 6.0% and when I persisted he gave me 5.50% and 2 points. I stayed on the case and requested a 1 point rate and he told me 5.75%. Whew, that was exhausting.Unfortunately, Joe did not provide APR for either rate which is a RESPA requirement nor did he volunteer to provide me with a good faith estimate.Ditech - Scored 0 out of 10
Ditech is a division of GMAC owned by General Motors and if Ditech's arrogance is an example of how General Motors does business it is easy to understand why they are bankrupt.Your Stealth Shopper struggled mightily with two attempts to pry a rate quote from this corporate colossus and failed miserably; about the same result as an amorous flea crawling up an elephants leg.The first call on Saturday was directed to Garret Dywer after the screener tried unsuccessfully to obtain as much of my personal information as possible. Once Garret came on the line he politely explained that he could not give me the time of day much less the cost of doing business with Ditech until I divulged all my personal information. Sunday morning I decided to give Ditech another chance. This time, Brook came on the line after I dodged the screener's queries. Brook also would not provide rates until she had my application. Her stated reason was that it is against RESPA regulations to provide rate information without the applicant's application. This excuse is total BS and when your Stealth Shopper grew a little attitude and carefully explained, slowly, using small words, that it is absolutely not against any regulation or law to provide interest rates without an application Brook hung up on me.Warning: Never submit a loan application until the loan has been throughly explained and you have received a rate quote with a good faith estimate accurately showing all the costs of the transaction including third party costs and prepaid expenses.
Being in sales I understand that it is good tactic to gather as much of the borrower's information as possible. It is a established fact that once a loan officer has an application he or she has better than even odds of getting the loan. That said, it is also the borrower's duty to obtain all the costs of a loan before they provide any personal information. In my opinion, it is extreme arrogance for any lender to insist on an application before they provide price.
The MM Stealth Shopper Strikes Countrywide
On Friday 4-25-2008, in stealth mode, our MMSS shopped CW three times and received three different answers for the same loan request, whoa dude.
First he spoke with Steven who refused to quote rates without a loan application. Steven claimed it was new CW policy to require an application before loan officers could quote rates. This arrogance ticked off MMSS and some of you may have read the nasty review written here earlier. But then MMSS's better sense took hold and he decided to check again.
This time MMSS spoke with Chauncey. Chauncey quoted a zero point rate of 6.250% without requiring an application, so far so good. But, when asked for a one point rate he quoted 5.875%. This answer left MMSS slightly askew, he believed the 6.250% but not the 5.875%. That rate was below quotes from other lenders and, when talking with some people you feel a little uneasy so, MMSS decided to go with his gut feeling and give CW another shot.
The third call was put through to David Leach. Finally a Pro! David provided lender fees and APR without being asked; he also quoted a zero point rate of 6.250% and, 6.00% when asked for a one point rate. This is in line with Friday's market so our secret shopper bought the 6%.
Neither of the previous two CW clowns mentioned APR which is required with telephone rate quotes. Actually the Clown #1 wouldn't provide a rate so I guess he is off that hook.
The lesson, once again is... be persistent and Borrower Beware.
Your Stealth Shopper
866.204.9733
Disclosure:
The information contained here is true and documented but please know your Stealth Shopper is a loan officer and competitor of the lenders shopped and all scores were arbitrarily assigned based solely on my attitude about each call.
The opinions expressed everywhere on this website belong solely to Bill Ladewig and are not endorsed by any other person or entity.
