Ethics & Lending

I’m certain that many people who read the headline will believe that it is an oxymoron- similar to: “I’m from the government and I’m here to help”. I have dealt with many professionals in the lending industry over a 25 year finance career; and the vast majority are competent, ethical people who truly are there to help. Unfortunately when you encounter that one incompetent or lazy person, it is then that those stereotypical sayings come ringing back into your ears.

The mortgage industry is not without those in it to make the easy buck. Whether it means they omit information or flat out lie to make an easier, or bigger, commission, I have seen the direct results of those actions. The extent of problems created by unethical or incompetent behavior ranged from monthly payments that were higher than they needed to be to the mortgage product being so wrong for the borrower that it caused the payments to fall behind and the house being foreclosed on.

I grew up in a small town in Iowa with grandparents, then parents who owned an auto dealership. My earliest lessons on customer service and ethics were that you might be able to make the quicker dollar now; however if the car wasn’t right or was overpriced, you lost that customer, their family, friends, neighbors, and casual acquaintances as customers forever! A small town unethical car dealership didn’t last very long in business.

The whole point here is, once again, if it looks too good to be true it probably is. The best way to protect yourself is to know who you are dealing with and ask questions to find out about their ethics. Unfortunately we don’t live in a small enough town where everyone knows who the crooks are and who they aren’t.

Fixed Rates for Conforming Loans (under $333,700) as of 7/20/04 (a.m.) are:
(rates are quoted at 0 points, for a 2 point loan subtract about half point in rate)

30 year fixed: 5.875% (APR 5.97%) monthly payments are $1,973.96/mo.
15 year fixed: 5.25% (APR 5.40%) monthly payments are $2682.54/mo.