What is a Mortgage Banker anyway?

An Interview with James Beaver

Just the Assistant:  First thing’s first: What about all those news stories we’ve heard about shady men in basements swindling the poor?  Are you one of those guys?

Boss:  I would say that there are very few basements in Texas, so no I’m not that guy. 

JA:   Let’s get something straight, Boss.  I’m the funny one here.  You just answer the questions. 

Boss:  Oh, right. Well, I never was one of those shady guys.   And for the most part, those guys aren’t in the business anymore, and the products they were pushing are no longer in existence. 

JA:  Okay, now that we’ve established that you are a good guy, when should a person call you?

Boss:  You should call me anytime you have any questions about home financing.  So that might mean you have a specific question, it might mean you want to kick around ideas with me like “does it make sense for me to refinance my home,” or “if I did buy a home, what would the cost look like?”  Most people don’t know that they can call and just ask me questions.

Also, you should call me to get pre-approved for a home loan.  This should happen before you plan to go home shopping.  If you want a seller to engage in negotiations with you, or even take you seriously, then you need to be pre-approved.

JA:  What exactly does that mean, to be pre-approved?

Boss:  Pre-Approved means we have pulled and reviewed your credit report, reviewed a loan application you have filled out and run it through a system which will generate a response saying you are eligible to receive financing.  So basically, pre-approval means assuming you can document your loan application with a complete paper trail, and assuming your credit and financial situation stay essentially the same, and assuming the home you would like to buy appraises appropriately, then you would be approved for the financing of this home.

JA:  How much does this cost?

Boss:  Pre-approval is free, and it is valid for three months.

JA:  So why should someone go to you for a home loan instead of say, their local bank? 

Boss:  A couple reasons.  First of all, we have a more hands on approach to handling our loans, our service level is considerably higher, and our pricing is better due to the fact that our overhead is significantly lower.  Plus, we are a lot faster and more efficient.

When you walk into your local bank, your loan application is taken by one person, then leaves that person’s desk and goes into a giant maze of the bank where there is rarely one person who is in control of your loan and responsible for the outcome. 

But here, you’ve got Chad Helmcamp.  He’s an expert at our products, he understands the whole loan process, and he has the ability to impact how your loan is handled at all stages of the process.  Your loan is given a lot more attention by people who understand the full process.

And again, we’re usually the same price or better.

JA:  Speaking of price, how do you make money?

Boss:  A couple of different ways.  Right now (and this will all be changing as of April 1, 2011 – stay tuned), we make money when we sell your loan to a servicing bank, and we make money via fees.  Fees typically go towards the standard costs we incur to actually do the loan.  Our profit is usually realized when we sell the loan.  Depending on how the loan is structured, the fees might make us a little profit, but it’s minimal.

However, we can customize the terms of your loan based on your needs.  This might mean we profit more in fees when we won’t make any money in selling the loan, or vice versa. 

 [note:  Envoy is a mortgage bank.  All we do is make home mortgages.  Once the loan has been completed, we sell the loans to servicing banks like Chase, or Bank of America – those are the banks to which you actually end up making your payments – win win situation because you get our expertise at getting you the loan for great cost and great care, then you get the benefits of having a large bank who handles the servicing of your loan well]

Just the Assistant:  Thank you for your time, Boss.  Now go answer all those phone calls.

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