Mortgage lender ratings under fire

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Q: "How much credence do you place in the 1- to 5-star ratings of lenders that many online mortgage sites provide based on reports from borrowers?"

A: Very little. For one thing, borrower ratings are based on a single experience covering a complicated process extending over several weeks. A good restaurant reviewer returns to a restaurant being reviewed four or five times, but a mortgage borrower is limited to one exposure, which might or might not be typical or representative.

Basing a judgment on only one unit of experience would not be that large a handicap if the borrower were well equipped to make an informed judgment, but many -- if not most -- are not. While most restaurant reviewers know a lot about food preparation, few mortgage borrowers know much about mortgages when they begin the process. This makes their interpretations of what transpires vulnerable to misperceptions.

Here is an example: A borrower receives ...