What They Won’t Do To Get You Into One of Their Mortgages!
If you, as a homeowner or potential homeowner, are a person who is dedicated to paying your obligations to the best of your ability, as is often revealed in a high credit rating, the mortgage lenders seem to compete vigorously for your loan business. Some lenders make much ado about “no cost” closing options and the latest generation of these advertisements include assurances that you will not have to pay attorneys fees! As a lawyer with a livelihood in protecting the interests of my clients buying or financing real estate I was so curious about these types of transactions that I actually refinanced one of my properties in one of these legal fee free zones. When my mortgage was approved, a notary was sent to my office to show me where to sign the loan documents. I compared the final costs and points to what were charged by reputable local lenders who encourage borrowers to pick reputable local lawyers or title agencies to conduct their closings and the differences, if any, were almost always in favor of using local professionals! I guess someone has to pay for all that advertising that is done by national companies like “moneybush.com” (names changed to protect the innocent). Whatever savings those companies gain in avoiding legal fees, they seem to lose by using escrow management services in states like California where those professional services may cost more than comparable services in other states. Then there is the Fedex cost to get documents from Notary back to the California processor and then back to the Clerk’s Office in the State where they need to be recorded. At least it is good for the economy if not the environment.
To summarize this diabolical business plan: (1) We make more money by not having to pay local loan officers to answer customer questions face to face; (2) We save money by centralizing down to one service center for the whole country; (3) We re-invest in advertising that makes the borrower think they are sharing our savings with us and we know that lending forms are so complex that fewer than 1 in 5 borrowers will ever actually be able to do any meaningful cost comparisons between our product and pricing and those of our local competition; and (4) we do actually offer them the convenience of in-home closings which we can afford by trading a volume of signings for notary services to perform in exchange for their very lowest rates.
So why ponder such things? What makes me invest precious thought today in this business plan? Frankly, I had to come up for air between helping clients work out short sales and bungled modifications by inept and disorganized lenders. I could not help but laugh audibly when an advertisement came across my screen for Notary Companies.
MACE! Don’t leave home to conduct Notary Closings without it. I’ve done my share of house-call closings in neighborhoods with extra bars on the doors and windows and a spirited pitbull inside. But I can honestly say that it never occurred to me to pack mace. I wonder if the experiences that give rise to advertising mace for notaries is the need for self-defense in dangerous neighborhoods. I suspect that the real threat to the notaries may be more subtle – perhaps it is the need to protect the messenger from delivering a confusing product to a frustrated borrower without legal advice and without being easily able to get the centralized processor on the telephone to answer questions.
I keep raising my fees to those “loanforest.com” type companies and they keep calling me to drive to their borrowers to conduct house-call closings. I charge far more on those adventures than I charge my own clients when I represent them and my clients sign documents in my quiet, professional and secure office with all necessary legal advice.
Well . . . . back to helping upside down and underwater borrowers get out of their mortgages!