When mortgage industry veteran Joe Parsons, a senior loan officer in California, was asked his opinion on the most essential things that homebuyers need to know, he shared very simple, factual information about the loan officer’s job duties.
Parsons stated that a loan officer at a bank or a credit union accepts an applicant’s completed form, and forwards it to the underwriting department. An independent loan officer provides more services to the borrower by way of advising them of the best loans, collecting documentation, ordering appraisals, and directly communicating with the underwriter for guaranteed loan approval.
But what happens if a borrower chooses not to use a loan officer?
Parsons said, “A large bank or credit union relies on the underwriting department to handle all of the above tasks—and these departments aren’t working as representatives for the borrower. The takeaway for the consumer: Mortgage rates available at an independent loan originator, whether it’s a broker or a small banker, won’t be higher than those offered through a big bank.”
When asked why the mortgage rates constantly change, Parson’s answer was technical, mathematical, and financially complex. From Freddie Mac to Fannie Mae, and from Mortgage Backed Security to fluctuating percentages, Parsons is one expert who believes that consumers could have prevented the subprime mortgage fiasco…if only they were better educated about how mortgage financing works.