Independent Banks, Brokers vs. the Big Guys
Who’s got your back in a purchase?
Zach Griffin of LaSalle Mortage recomends going local.
Photo by Chris Duffey
With the heavy bidding competition for Bay Area homes these days, local independent mortgage brokers and community banks are touting their skills at smoothing the process of obtaining loans for those fortunate buyers whose offers actually get accepted.
After all, nothing is more frustrating than to finally get a bid on a house approved and then have the loan fall through.
Zach Griffin, branch manager for LaSalle Mortgage’s Oakland office, said an independent loan adviser is “the point of contact from the application to the funding.”
Having a single individual on top of the approval process—as opposed to dealing directly with large national banks that often operate with call centers scattered about the country—can help eliminate glitches, Griffin said. With an independent broker, one local individual is responsible for keeping track of all the paperwork required for a loan.
A loan application with a large national bank can sometimes get handed off from one department to another, and the client can sometimes end up talking to different people with different levels of familiarity with the application, said Stewart Davis, branch manager with Mason-McDuffie Mortgage in Oakland.
“Getting into contract these days is a small miracle anyway, so you want everything else to go smoothly,” Davis said.
A local loan officer uses appraisers who know the area and market. They can apply for the right loan based on the buyer’s individual needs and adjust on the fly to find the right fit, Davis said.
“Sometimes, the lowest interest rate loan has the strictest income guidelines,” he said. “Each bank might have different issues, and we might be able to get a loan at a little higher rate at a different bank because the lender is less strict.”
A local mortgage broker also uses real estate appraisers who know the area so that the property is properly valued to qualify for the loan.
“The big lenders use large appraisal management companies out of the Midwest,” Griffin said. “You see appraisers from Antioch assigned to do appraisals in Oakland.”
Griffin said that LaSalle Mortgage’s parent company is based in Alamo and that it is a family-operated, privately held mortgage bank that can create “tailored products” for people “who may have a lot of assets but not a lot of verifiable income. We can actually talk to the underwriters, and all the underwriting is done in Alamo.”
From the point of view of a real estate agent, Devin Ratoosh of Marvin Gardens said he always urges clients to seek “a personal kind of adviser” for their loan applications, unless they are getting a big interest-rate discount directly from the bank.
“You really want one person looking at all of your things and keeping the process going,” Ratoosh said.
Ratoosh said he tells clients to work with whomever they want, “But I also say, ‘Here are the brokers I’ve worked with before, and they’ve done a good job.’ ”
Rod Alba of the American Bankers Association in Washington, D.C., countered with several advantages of dealing directly with a bank that provides a multitude of services.
This would include the possibility of negotiating a better interest rate by opening a checking account, a certificate of deposit, or other savings account at the same time as a mortgage.
“When you go directly to a bank, you can get often better pricing through some packaging,” Alba said. In addition, he said that some lenders don’t deal with brokers, so that the borrower might be missing out on a great rate.