AgentMortgage

Do large-name lenders provide better service?

Part 2: Finding right mortgage at the right price

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(This is Part 2 of a two-part series. Read Part 1.) "I am choosing between a loan from an Internet lender and one from a well-known bank. The loan officer at the bank made the following claims regarding online lenders: First, their loan officers are not commissioned, and therefore their service is generally poor. Second, Internet lenders sell all their loans, so borrowers don't know what lender will service their loans. Third, Internet lenders don't stand by their rate locks." Let's take the issues one at a time. Does the compensation system used by major lenders result in better service to borrowers? Loan officers (LOs) working for name lenders, such WaMu, Citibank and GMAC, are commissioned, and successful ones make a lot of money. They are highly paid because they bring in the borrowers. Commissioned loan officers constitute the marketing muscle of the major retail lenders. In contrast, LOs working for Internet lenders, such as E-Loan and Amerisave, don't bring borrowers to the fi...