In the past a mortgage was “orphaned” when the loan officer who originated the mortgage left the company. Since the loan officer was the point of contact for the borrower for future mortgages, the loan was now orphaned. The branch manager of an orphaned mortgage would usually assign these mortgages to another loan officer who would send out a lender introducing themselves as the borrowers new point of contact.However, truly professional loan officers have evolved these days and take a much more proactive approach to their customers’ financial situation. Professional loan officers take an advisory role to their customers and take into consideration current needs as well as future goals of their customers to make sure the mortgage product they take helps them achieve these goals.
A professional loan officer will usually offer to review their customers’ financial situation at least annually, free of charge, and make recommendations based upon their current and projected financial situation and changing financial goals and needs. These loan officers are not just trying to get another refinance when rates drop.
So, if you have a mortgage and never hear from your loan officer (except when rates drop and they want to refinance your mortgage) you have an orphaned mortgage.
If my loan officer keeps in touch with me it is only because they want more business for themselves - they really don’t care about my situation.
Unfortunately, this may be true of many loan officers. Many will mail you a postcard monthly so you have their contact information in case you need another mortgage. However, there are a lot of true professionals in the business who do really care about their customers. Yes, the loan officer will get more business by keeping in contact with you but you can benefit from his efforts as well.
Mortgages are just a commodity and I call around to get the lowest rate possible and go with that guy.
I know a lot of people who have said this and live to regret it. In fact, over the past several years there were a lot of people who made the decision to use another loan officer who I have heard from since. Many were convinced to take an exotic mortgage, such as a Pay Option ARM, that they neither fully understood or was the correct mortgage closed because the loan officer they ended up with was inexperienced. Some of them ended up with a higher rate because they did not lock in the rate when they should have. Some of them ended up paying exorbitant closing costs and fees that were never properly disclosed up front.
Remember, having the lowest rate on the wrong program is not a good deal. Getting a fair rate on the right program with a loan officer who understand and cares about your financial needs and goals is.
If I don’t hear from my loan officer, how does that cost me money?
Here are a couple ways:
Over the past 3 months there were several times when rates were at or below 5.500% for a fixed rate, 30 year mortgage depending on your credit score and LTV (See “How much will my credit score cost me on my next mortgage?” for more information on this). When this happened, all of my customers were notified and had to opportunity to lock in these rates. After rates had crept back up (these rock-bottom rates were available a very short time) the news started reporting rates at their lowest levels in years. I received several calls from people who read my blog about refinancing. Unfortunately, the rates were long gone by the time they had read about them, which is often the case.
Also, at the end of last year, Fannie Mae and Freddie Mac announced they were introducing delivery fees for mortgage with credit scores below 680 and LTVs over 70% (See “How much will my credit score cost me on my next mortgage?”). I contacted my customers that were in this situation and advised them to refinance before these changes took place. I was able to refinance several of them before the changes and saved them a lot of money – most of these customers would not have been able to save s much money on their refinances had they waited due to the increase in rates they would be subject to now.
Lastly, a customer of mine had contacted me in the fall. They had an ARM that adjusted up more than 2.5% in the spring and they had fallen behind on the payments due to the increase in payment. They had called a couple sub-prime lenders and were not going to be able to get a better rate and lower payment with them. They called me and I told them about the FHA Secure Program (See “FHA Offers Relief to Homeowners with FHA Secure” for more information on this program) and refinanced them to a lower rate and better payment. They haven’t been late on a payment since.
There are many other ways that having a loan officer you trust can save you money.
So, what do I do if I have an orphaned mortgage?
Find a professional loan officer, such as myself. I am happy to help people with their financial needs and determine what mortgage program is right for them. Even if you are not ready for a new mortgage right now, I will be happy to evaluate the loan you have in light of your needs and goals and make recommendations to you. I talk to many more people who do not need a new mortgage than I do to people that do need a new mortgage now. It is part of my job as a professional loan officer. If you have questions or about your mortgage please don’t hesitate to give me a call or send me an e-mail.
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