I don't know much about the mass-market mortgage brokers, but can speak highly of the local shops. They are excellent at breaking up logjams in the underwriting process. Two examples, in both cases they simply took the loan to a different lender.
I was buying a property and in the initial loan application they inquired as to where I would get the cash for the down payment (to make sure I wasn't borrowing it, too, a common and reasonable question). I said "sale of marketable securities" and provided them with a brokerage statement showing part of my stock portfolio, the value of which FAR exceeded the amount of the down payment. Before closing, I got a handsmoe annual bonus that left me with enough cash to make the down payment, and chose to use that money, instead of eating capital gains taxes from selling the stocks. The underwriter dug in and demanded that I show evidence of having sold the stocks, and held up the closing because I wa using other cash instead of selling the stocks. The mortgage broker I had engaged (because I was working from a distance), simply called another bank that he worked with, described the situation and asked if they would take the loan. They agreed. The broker picked up the file from the yo-yo that had it, and took it to the other bank, and we closed on schedule.
In the other case, I was the seller, of my last home outside Cleveland. The county required an inspection of the septic system with every home sale where that apllied. If it failed, it was the responsibility of the seller to leave money in escrow to bring it up to snuff. When I bought it five years prior, the sellers then did have to replace the entire system, whcih was 30 years old by then. So I lived in the house, by myself, on a septic system rated for a four-bedroom house. In other words I wasn't overtaxing its capacity. I got caught in the crash so it set for quite a while, vacant, as I had moved east. We're working toward closing and it comes time for teh septic inspection, and Catch-22 kicks in. They can't inspect a system on a property that has been vacant for more than six months, and they can't inspect, if it has been vacant that long, until after it has been occupied for six months. The bank won't sign off. We tried to work it out by having a county-licensed inspector inspect it anyway. He couldn't write it up as an official inspection because of the time requirements, but he went to great lengths to explain that the system was five years old, that there was minimal sludge in the tanks and that the mechanical equipment and drain fields were in first-rate condition. Add to that that I was losing enough on the house (Imagine the seller having to bring cash to closing -- there's been a lot of that the last few years.) that I was in no position to cough up another 15 grand to leave in escrow for six months. Again, the underwriter was going to hold up the closing. It didn't help that the buyers were city folk a little nervous about this whole idea of having a well and septic system. With the unofficial inspection they were willing to take their chances after I dropped the price some as an incentive and still the bank was dug in. The buyers had a mortgage broker involved on their end, and I told them to either have the broker take the loan to another bank or to start shopping again, something they should have done weeks earlier. THey did and we closed five days later, after I coughed up another pile of cash in escrow to cover the interest and taxes accumulating while their first lender dithered.
So they do serve a purpose if they are truly working brokers in the local market. I still have my doubts about the Lending Tree type outfits. My suspicion is that they are the ones actually making the oan to get to closing, and then selling them off. I don't know it for fact, but it wouldn't surprise me if a lot of their loans are were the sub-primes that got securitized and helped ignite this whole mess we're in.
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Today's Featured Article - Restoration Story: Fordson Major - by Anthony West. George bought his Fordson Major from a an implement sale about 18 years ago for £200.00 (UK). There is no known history regarding its origins or what service it had done, but the following work was undertaken alone to bring it up to show standard. From the engine number, it was found that this Major was produced late 1946. It was almost complete but had various parts that would definitely need replacing.
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