A MORTGAGE IS NOT A COMMODITY
From time to time I hear people saying that the mortgage loan officer is a dinosaur. The reasoning is that a mortgage is commodity, that every mortgage has the same criteria, and that they are, therefore, mere commodities.
By extension, the argument goes, borrowers do not need humans involved in the process, and that they can benefit from reduced costs by eliminating the human element from the equation.
When I hear this argument, I wonder if the person ever got a mortgage.
If they had, they’d know that the “human element” is critically important and that many, if not most, borrowers would never be able to buy a house without assistance from the Realtor and the loan officer.
As an example, think about all the subtleties of various loan programs. Let’s assume a borrower goes online and choose Program 1-A and gets turned down. He then applies for Program 2-A, Program 3-A and Program 4-A, getting turned down at each of them.
At this point, does he get so discouraged that he simply gives up?
Had their been a loan officer and Realtor involved, he’d have known that of the ten programs offered, he only qualified for the tenth one. A knowledgeable loan officer could have steered him right away to program 10-A and made certain he chose the right loan program to match his individual situation.
One argument for eliminating the human element also has to do with the reduced number of programs. The argument is that loan officers were needed 2-3 years ago when there were hundreds of programs, and the borrower needed help choosing among all these choices. Now, they, say, it’s either a conventional 30 year fixed or an FHA 30 year fixed, and anyone can choose between these two.
Again, no one would say this if they’d tried getting a loan recently. Awhile the number of programs has, indeed, shrunk, it’s a heckuva lot more than two. And more importantly, while there maybe be fewer programs, they’re all much harder to qualify for.
A good loan officer can help borrowers choose the right program and help them qualify for that.
And no computer program can ever do that as well.