Does Your Mortgage Broker Suck?
If you think your customers are in good hands with your mortgage broker
, you might want to think again.
It's About Time Someone Said Something
This article is personally motivated. Several months ago I had the experience of working with an exceptionally professional REALTOR while shopping for a rental property. I confess that I can be a demanding client from time-to-time, but my hat was tipped to this REALTOR for being patient, courteous, and professional at all times... That is until I had the displeasure of working with his preferred mortgage broker.
Now in the case of this "broker", I use the term lightly. A broker to me is:
- Knowledgeable in their field of practice (Real estate, mortgages, insurance, etc.)
- Professional with their conduct
- Interested in getting their customer the best deal
Here's the opening conversation I had with the "broker":
MB: "Hello?"
Sam: "Errr... Hi. Is this *** with *** mortgages?"
MB: "Yeah. What's up?" ("What's up?" Seriously? What about a good old - "hello, this is *** with *** mortgages, how can I help you today?")
Sam: "Ok. My name is Sam Prochazka and I was given your number by *** from ***."
MB: "Ah ha..."
Sam: "He told me you might be able to get me a better rate?"
MB: "Oh yeah - sure. No problem. How much do you make?"
And so on...
I was so amazed by this lackluster introduction that I decided to keep going down the rabbit hole. Here's what I discovered:
- This broker was never up before 10:00am, and when I spoke to her in the morning she generally sounded hungover.
- She only consulted one lender, likely because of volume bonuses (so much for "brokering")
- She never met with me in person
- She omitted information on my application to make it go more quickly (fraud anyone?)
The result: I ditched the broker, went to a bank, and told the REALTOR that his mortgage broker made him look terrible.
Some mortgage brokers suck
There are crappy professionals in every industry and mortgage brokers are no different: some just suck. The problem is that most mortgage brokers take referrals from REALTORS, so if they suck they make the referring REALTOR suck as well.
- According to the CMHC (2009), only 44% of people using a mortgage broker were "Totally Satisfied"
- The same study found that 22% were not satisfied... 22%!!!
- A further 34% of customers were "satisfied" but did not have their expectations exceeded
Wow... Imagine less than half the coffees you buy at Starbucks tasting good, and the rest ranging from lukewarm and flat to raw sewage. That's what people experience with their mortgage broker.
Here's the other side of the story - your mortgage broker can't just "not suck"; they need to be excellent! After all, your deal and commission relies on your customer getting financing. If the broker sucks, it could cost you the deal!
What to do?
Here are some ideas:
- Get a good mortgage broker - Easier said than done, but use these as rules of thumb:
* They use a Customer Relationship Manager (CRM)
* They have a good website (this is a tall order, but the last update date of the rates is usually a good indicator of the quality of the website - more recent being better)
* They are available at 8:00am in the morning, and give their cell phone numbers to customers
* They can describe their lending strategy
* They don't pay a referral fee to the REALTOR (this is usually chump change anyway and isn't worth losing a deal over)
- Have a customer service survey - Sending out a satisfaction survey to your customer after every deal is a good idea. If your mortgage broker is a weak link you'll see it on the survey.
- Don't be afraid to ditch your current broker - If they suck, don't use them.
by: Sam Prochazka
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