I have heard from several mortgage lenders and brokers to stay away from the online scene. They actually suggest going to local banks because most times they are able to give the lowest interest rate.

So sorry to hear of your misfortune. I hate to hear/read stories like this.
Hope this one works out for you.

Wow! I'm sorry you're going through that! Don't let them get away with this. I suggest you file a formal complaint with your Atty General in your state as well as the State that Loan America is in.

Wow, thanks for the heads up. Maybe Dave on this board could help....I don't know him or anything more than what I've read him contribute here, but he just seems like one of the good guys.....

Thanks. We filed complaints with The BBB, Lending Tree, the Georgia Dept of Banking and Finance, and the Texas Dept. of Savings and Mortgage Lending.

I'm a regular over on the garden forums. I know that those posts stick around a while and are easily picked up by google and yahoo. Hopefully they do the same over here and will be picked up by potential victims/clients of these guys.

Keep us updated to see if you get any results. I think you will get a much faster response by complaining directly to the GA and TX Atty General. Sometimes, they get really quick action.

I'm sorry you're going through this. I had a horrible experience with eloan. They suddenly said they needed something the afternoon before I was supposed to close. Suddenly they are telling me that my estranged husband, who was in Mexico, had to go to the American Consulate to fax this paper to them. I had specifically discussed this item with them previously, and it was NOT required by any law or lender.

Then AT THE CLOSING, they were asking for more stuff -- I thought I was going to have a breakdown right there. If it weren't for the realtor and the title company, who were wonderful, I am sure I would not have closed. I will never use an online mortgage company again.

I have to say I used LendingTree.com 2x to refi and both times were without a hitch. The only "problem" I had on the first was that the bank I chose was in North Jersey and the loan officer was a new kid and he kept saying I needed to settle at a lawyer's office. (Must've been drilled into him at school). Got past that but I forget where we actually signed. Think it was at the house. But with both never had any problems with hidden fees or extra last minute documents.

Based on reading this I might be reluctant to use an online source for a house closing. However, maybe for a refinancing where I was not in a rush for the money I would consider it. A friend also used either eloan or lendingtree for a refinance and had no problems

jjfrisco, I hear an ad from this agency every day:

I'm in the process of refinancing and will close this Friday.

I'm a little disappointed with lendingtree at the moment, as they claim to beat or match any other offer. I applied on-line and received 2 offers and neither were competitive to what I found. Btw, neither offer were from reputable lenders. Anyway, I was urged to speak with their customer service dept by the loan consultant. After speaking with their customer service, I found out all they do is try to find fault with other lender's Good Faith Estimates. They gave me high praise for having such an excellent credit history, and I should never deal with a broker.

Anyway, after listening to all this crap, a better offer never appeared. They offered me a discount on some fees, but thats about it. They never even put that in writing though.

On the flip side, lendingtree supposedly guarantees the closing costs, so I'm surprised this bait&switch happened to the OP. A year and a half ago, I went thru lendingtree for a HELOC and that deal was fine. No surprises at closing.

jasper - best of luck to you, I hope that you do not have any issues. We were given similar praises for our 781 credit score and that this would be a rubber stamp, no issues, etc. Just keep after them until they get you everything in writing, mainly the HUD statement. That is how I found out what was behind the curtain was not close to the previous good faith estimates.

As an update, we were able to get the same rate (5.85 30 yr fixed) with a local broker our real estate agent knows. We are targeting closing this friday (only 1 day delayed). The broker, agent and ourselves were getting papers to the underwriters until 6:30 this eventing, but I have my fingers crossed.

When we got home, there was a message from a Loan America Inc "manager". I expained the situation to him and that we had made the complaints. His only reply was "sorry it didn't work out". I'm not sure I would trust them if they had "fixed" the situation, but I would at least expect more from a semi-reputable company.

Also, as a side note. Lendingtree has been around for a long time, and that doesnt happen if all of their lenders are bad. We actually used them to get in touch with an auto loan several years back. We were given a blank check that was good up to a specified amount. We went to the dealer, filled in the amount, and drove off with our new car. The loan was sold to bank of america and we were 100% satisfied.

I believe they try to weed the good from the bad, its just difficult to control on the internet. There are good deals to be had, but there is also a risk associated with those deals.

I'll keep you posted on what happens. If you are reading this and considering an internet loan, please do your homework and always have a plan B.

Folks,

LendingTree is nothing but an marketing company that collects your info to sell as leads... that is all! They don't compete, they don't guarantee, and they don't even screen who your name gets sold to! Whoever gives them the money gets you (are you feeling dirty yet?)

See this;
LendingTree and Home Loan Center, Inc.
http://www.lawyersandsettlements.com/case/lendingtree.html


A nationwide class action lawsuit has been filed against the online lending exchange and its subsidiary for allegedly engaging in unfair business practices and false advertising.

I realize I am talking to the wind when I say this... but...
Shopping and deciding your loan provider based on Quotes and Good Faith Estimates... you got what you bargained for.

My rant;
Choose your provider according to preliminary "quotes,"
And you've simply chosen the most successful Liar.

Choose according to character quality, competitiveness,
honesty, and your personal assessment,
And you will set yourself up for the better Experience AND
the better bottom line pricing!?

LASTLY,
Any loan profesional who DOES NOT have an internet presence... is at the VERY best merely "behind" in their practice. At worst, they're a fly-by-night operation hoping not to be noticed.

If you treat your mortgage financial process with the gravitas of the dollar amount it represents (instead of the dollar amount of a toaster oven,) you'll have far better results.

Cheers,
Dave Donhoff
Strategic Equity & Mortgage Planner

I fell for those lending tree ads a little bit--in that i filled out their query. I can count on one hand the times I've been influenced by advertising. This was one of them, because the idea of the ads (that banks compete over you) sounds like a good idea. But, as DD says, they're just a lead-generating service for the lenders.

Fortunately for me, none of their companies were interested in a loan as small as mine ($100k or less).

I went with ING direct, even tho they only do ARMs, because the process was so simple, the legalese was understandable, and the fees microscopic.

This happened to the first potential buyer of our house. She disappeared and didn't answer the phone the week of closing, or show at the closing. RE agent didn't mention any lender or broker but said that this sort of thing happened all the time.

Thanks everyone. As an update we were able to close on our new house today. A local broker, recommended by our realtor, was able to give us the same rate no strings attached.

We owe some serious thanks to the realtor, broker, and title company. I came to them on tuesday afternoon with my problem and we were closed by friday afternoon, only 1 day later than originally scheduled. I still cant believe it and am off to buy gift certificates and flowers for those who helped us out.

This is an interesting thread. JJfrisco, congratulations on finding your way through the labyrinth to a closing. I wish I did not know that your story was all too normal and accepted in this industry.

The mortgage industry, like all businesses has more than its fair share of "get rich quick at the customer's expense" members. In the last five years there was a large influx of people into the mortgage marketplace because of the promise of quick easy big money. Many of these people attended no formal training and worked in environments where the quota of closes was more important than the long term quality of those transactions. Many less than prime credit customers are now feeling the impact of these closings.

Who is to blame? There is not a simple answer to this question. Is it the fault of the Government who allowed 105% loans with no income documentation on investment property? Is it the fault of the Market, who bought up every sub-prime 100% stated negative amortization loan they could get because of the potential ROI? Is it the fault of the Lenders who continued to ease qualifications to get a loan so that a borrower in California could buy a million dollar home with no proof of income, no down payment, no closing costs, and run a 1% payment on a negative amortization loan for 5 years then walk away? Is it the fault of the brokers who provided loans, not consulting for their clients so they could make as much money as possible? Is it the fault of speculators who snapped up every home that came on the market for more and more money in order to take advantage of the value bubble they created? Is it the fault of the Loan Officers or Bankers themselves for taking advantage of the lax market rules to make six or seven figure incomes? Is it the fault of the customer for being so uninvolved in the process that they often close a loan without ever reading the loan documents they are signing?

Yes.

The current market is the result of all these things and many more. I have had the privilege to lead and grow some very fine sales people who are or were in the mortgage industry. I have been involved with Lenders and Brokers. I have written and executed the training for Bankers. I have run and do run a financial mortgage company where the customers true needs are examined first and then, if it makes sense, we look at a mortgage product. The consultation and discovery or development of a long term plan for home ownership, not home renter-ship is the driving force in what we do. That is not the norm, especially in a market like this where every potential customer could make or break your career.

What I can tell you is:

1. Brokers or Lenders are for profit companies. The difference between lenders and brokers if that a broker must show you the Yield Spread Premium (YSP) on the closing documents; the lender does not. YSP is the premium that is being paid by the market based on the desirability of the loan. This is money paid to the lender or broker when the loan is securitized and is a portion of the money you will pay over the life of the loan.
YSP is how you accomplish a no closing cost loan. The lender simply offsets the closing costs that can be paid by the lender (which ones can not be depends on the state rules) often times with a higher rate than you would get if you paid closing costs. In these loans you need to look at how long you intend on being in the home. Take the difference in payment between the standard loan and the no closing cost loan and determine how long you will make payments before you would have been better off to pay the closing costs.

Brokers make their loans as the middle man. They create relationships with few or many lenders and are bound by the lenders rates and qualifications. The underwriting of your loan happens at the lender.

Lenders make their loans based on guidelines established by the market that they are selling into for servicing and the rules on their lines of credit. In most cases a lender will not retain your loan for the life of the loan. They will sell it to another company to service the loan (receive the payments, interest and fees) so they can recover their cost of funds. Many times a lender will act like a broker by sending your loan to several other lenders who can provide servicing prior to closing. This is done to ensure they have a buyer for the loan before they grant the closing.

Everything clear as mud now? Yes it is a very fine line between them. Having been involved with both I can clearly state that there are advantages and disadvantages to both. It comes down to who has the real deal for you. Both are worth looking at.

As for lead sites, which took a good part of this thread in the middle, lead aggregators are all over the Internet. Do a search for get a loan. These sites seem to promise you delivery of a certain product or rate and then turn the information you place in their hands into a lead. This lead can be handled by the company itself or sold to the open market as a commodity (sometimes both). Brokers and Lenders buy these leads and then begin the process of trying to get in touch with you and take you out of the market before anyone else does. Some companies will tell you anything you want to hear to get you to say you will go with them. They count on the fact that once you get involved you will be too far down the line and too frustrated to change. This is not the right way to do business, but that does not stop many from doing it so they can get results. Some sites will tell you that up to four lenders will contact you, this turns into weeks, months maybe even years of calls as your information gets re-circulated through multiple sites as a new lead. This is not all sites, but some.

2. As a borrower you should take the time to make sure of whom you are dealing with. Who are they? How long have they been in the business? How do they conduct their business? Are they acting in a way that makes you feel that they are interested in your overall financial picture and a plan for the future or are they only interested in closing the loan? What is their rating on the State Department of Banking and Finance? If there is a blemish can they explain this to your satisfaction (after all not all complaints are justified, some are just venting). How did they deal with the complaint? Does that seem reasonable and professional? Just because the company is a known name does not mean that you are dealing with someone who knows the difference between a GFE and a credit authorization. I have dealt with many national banks where I wound up showing the loan officer how to use the computer system to determine a debt ratio (once I had to explain what a debt ratio was that deal was never done needless to say).

3. In this market the program requirements are changing almost hourly. Appraisals are now coming under heavy review for any potential of adjustments or depressed markets. Programs from Lenders and the Government are a moving target. Take a walk around the neighborhood (your if you are refinancing, the target if you are buying). How many homes are there? Are they all similar in size? How many homes are for sale? How long have they been for sale? Are there any foreclosures in the area (this will impact you!)?

4. Rates are pretty much where they have been for the last three years, for prime confirming borrowers (80% loan with full income documentation and credit above 680) between 5% and 7%. What is changing is who you have to be and what you have to prove to get those rates. Your profile is made up of your credit (score and history), the collateral (the property itself - value, comparables and likely time to sell if the lender has to eat the loan) and your capacity to pay (how much do you make a year, how long have you made it and how much do you have in liquid assets).

So, please do your homework. Gather your bills, bank statements and pay stubs and really work out where you are before you start. Look at the person AND the company you are doing business with. Decide on a reasonable amount of profit that you are willing to pay for the service. Tell your service provider what that is up front and be willing to negotiate it based on great service. Decide if you are willing to pay for that service up front as a closing cost or over time in a higher payment. Remember that sometimes if it seems too good to be true, you may have found one of the rare individuals that is truly gifted in his or her craft and that they may have an insight that average loan officers may not care to find.

As I have said, I have worked with a few very talented people in this industry and those who actually care about the customer, rather than the payday, are a jewel to be treasured.

Poor service should be reported to the Department of Banking and Finance in that state. Other complaint data can be given to the BBB and posted on sites like this.