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My Mortgage Broker Post Didn’t Sit Well With This Mortgage Broker

By JLP | June 3, 2007

It’s getting harder and harder for me to write something that isn’t considered offensive by at least one person. This time it was Don’t Get Taken Advantage of by Your Mortgage Broker. Fellow blogger and mortgage broker, David Porter, left this comment regarding that post:

JLP,

I know it is fun to bash the mortgage industry these days. After all, we just went through a tumultuous time of significant volumes and it seems that every low life on the planet got into the mortgage business.

However I think that you should give some pause before you recommend to your readers what ever you can find on the planet to publish.

You work for UBS and if everyone followed your advice, UBS would not be here tomorrow. I can tell you from experience that my UBS advisor was NOT the best deal on the planet. I used him because I could trust him, he had 8 times more money then I did in the market, and he was always honest with me. He managed money for billionaires so I figures he might now something that I didn’t and I was willing to pay him for it. And trust me…he didn’t get his information from journalists.

If you had a brain tumor, would you be looking for the lowest cost brain surgeon? If you were wrongfully accused of murder, would you be looking for the cheapest attorney?

Come on JLP, I like you but quit following this incessant cry of the masses to constantly find the cheapest.

If you are buying a toaster, then fine…find the cheapest. But when it comes to a trusted adviser, helping you make the most important decisions of your life, how can you advise this approach?

If I called you tomorrow and said that I expected you to match a trade price of $7 per trade what would you say? I would hope not! At UBS you had better learn to be better than the broker at Schwab or you will be out of business.

Just as a $7 dollar per trade would be an insult to you and make a commodity of you, I would ask that you quit advising your loyal readers to go for the cheap in financial services. Going for the cheap in financial services will only bring you ruin AND you will never have a lifelong relationship with someone because the cheapest doesn’t translate well in financial services. Please understand that I am NOT talking about price. Charles Schwab does very well for people who want cheap. But the beaches are littered with people making their own decisions and following the advice of $50,000/year journalists.

You need a mortgage then work hard to find the best darn mortgage broker you can find. Check their references. If they are more expensive, then why would you pay them more. Ask them that! If you don’t like the answer then…run and run fast! I can tell you that over 20 years and 7,000 loans, people did not use me because I was the cheapest. People used me because I listened to their needs, and found the best solutions in the marketplace for them. In fact, I took their “cheapest deals” and put them in my spread sheet and let THEM see how horrible these good deals were.

JLP, you are slapping the face of every professional financial services provider.

You look at any financial service provider… the best and the cheapest NEVER meet. Please quite advising your readers to work with the worst in the financial services industries.

I hope and pray that you will consider this and please take this in the spirit in which it was intended.

My response:

First off, when I talk about an industry, I’m not bashing those who serve the industry well. I’m bashing the “bad guys.”

Secondly, go back and reread the post. Not ONCE did I say anything about finding the cheapest anything. I did say that it is important to not pay a higher interest rate than is necessary. Is paying a higher interest rate equal to getting better service? I don’t think so.

I’m not against mortgage brokers making a living. What I am against is mortgage brokers who sell the product that makes them the most money regardless of whether or not it is the best product for the customer.

Finally, I found this sentence a bit amusing:

“Please quite advising your readers to work with the worst in the financial services industries.”

I really hope that’s not what he thinks I do here. If that’s really what I’m doing then I guess I shouldn’t be blogging.

One other thing: I don’t work for UBS.

Topics: Mortgages | 14 Comments »


14 Responses to “My Mortgage Broker Post Didn’t Sit Well With This Mortgage Broker”

  1. The Blackhat Says:
    June 3rd, 2007 at 5:38 am

    Yeah JLP is right. David Porter juz got too emotional about it. I think you (JLP) presented a fair view of the subject and it was very obvious not intended as a mortgage broker bashing session. The whole point of the article was so that we be careful and aware of what we do. David Porter…quit wasting your time with stupid posts.

  2. David A. Porter Says:
    June 3rd, 2007 at 8:17 am

    JLP,

    Have you ever read something and it just got beneath your skin? Well, that happened to me last night when I read your post.

    I suppose in hindsight I should have given myself a little time to cool down. You see, I am very tired of the bashing my industry has taken in the last few years. Frankly, as I have written many times my industry deserves the spanking that it has received.

    However, there are many thousands of hard working mortgage brokers out there who have very high integrity and who work very hard to be a good steward to their clients and industry.

    I also suppose that my anger was really pointed towards the Wall Street Journal writer and not you. I find no fault in your comments what so ever.

    JLP, please accept my apology and I seek your forgiveness for the horrible, anger filled delivery of my message.

    A headline that reads, Don’t get taken advantage of by your mortgage broker implies that you will be taken advantage of. That headline set me off, as well as the Wall Street Journals implications that follows.

    I am now off to church, hat in hand, to seek even more forgiveness for my sometimes misdirected passions.

    Ah..the pleasure and the pain of being human.

    You handled this very well.

    Hat tip!

  3. JLP Says:
    June 3rd, 2007 at 9:19 am

    David,

    Thanks for the comment. Perhaps I should have titled the post something like “Things to Consider Before Visiting a Mortgage Broker.” Also, I should have linked to mortgage brokers I like and respect so as not to leave the impression that I’m against an entire industry.

    Obviously mortgage brokers have a niche to fill. And, as I have said, I’m not against an ethical broker making a living.

  4. db Says:
    June 3rd, 2007 at 9:35 am

    I liked your headline.

    DB

  5. Foobarista Says:
    June 3rd, 2007 at 2:53 pm

    I used to read “The Motley Fool” mortgage group and there were some mortgage brokers there that gave generally good advice, and who seemed quite ethical – although they did have a fondness for talking down fixed-rate mortgages that I didn’t like.

    But one thing I didn’t quite get is their idea of having a “relationship” with a mortgage broker: this seemed to be one of their primary ideas, and it would seem to me that, unless one is an active real-estate investor, one shouldn’t be doing enough mortgage transactions to need a “relationship”.

    Another problem is that a “good” mortgage broker to many would be the one that got them into the biggest house with the cheapest initial monthly payment with the least hassle. It’s definitely not likely to be the one who said “you can’t afford it”…

  6. JLP Says:
    June 3rd, 2007 at 3:35 pm

    Foobarista,

    Yeah, I couldn’t tell you the name of the mortgage broker that we worked with when we bought our house nearly 8 years ago.

  7. Chris Says:
    June 3rd, 2007 at 4:21 pm

    I didn’t see anything in the article that was necessarily bashing mortgage brokers. All consumers should be suspicious of people in these types of industries, from car salesman and financing to mortgage brokers. Why? Because being suspicious, educating ourselves, and not taking a broker on his word for granted is the only defense we have. There is a huge potential for being taken to the cleaners.

    I am absolutely sure that most brokers are honest. This isn’t personal, its business. Articles like the one you wrote are intended to protect us from the small percentage of brokers out to make an extra buck at the expense of the consumer. Trust is not something that is assumed, it is something that must be earned. And unfortunately, most people do not buy houses very often, so unless you find a broker that comes with many references from people you DO trust, where is that trust supposed to come from?

    I think that’s just an unfortunate result of working in the industry.

    Also, why should we not be looking for the cheapest broker, the cheapest mortgage? Even if we go with a more expensive lender that will ‘treat us right’, it can easily be sold off to some other bank. Consumers should be shopping around on their own, not putting all their trust in one broker.

  8. The Blackhat Says:
    June 3rd, 2007 at 4:57 pm

    Well done…David Porter…thats the spirit lad. Lets continue the constructive work around here.

  9. Jonathan Says:
    June 4th, 2007 at 2:02 am

    “Don’t get taken advantage of by your mortgage broker implies that you will be taken advantage of.”

    To me, that simply implies that you could be taken advantage of. Which is true.

  10. chicago auto insurance Says:
    June 4th, 2007 at 7:41 am

    You must be the best bad guy hunter i have ever known in the online world. It’s nice to know that there are still people like you these days.

    i just hope you don’t get me for plagiarizing in my early blogging career back two years ago.

  11. The Unknown Professor Says:
    June 4th, 2007 at 10:50 am

    If your readers want more “inside” info on the mortgage industry, there’s no place better than Dan Melson’s Searchlight Crusade at http://www.searchlightcrusade.net
    He does a great job of breaking down the mortgage process, and does a lot of cross-referencing of his posts so you can easily find useful related pieces.

  12. savvy Says:
    June 4th, 2007 at 12:28 pm

    I like how a mortgage broker is upset that you are advising people to do their homework before obtaining a mortgage.

    My recent investment property purchase led me to contact several mortgage brokers. Out of the four brokers I contacted, three were either downright crooks or complete morons. I did however find an excellent broker who I would do business with again. He encouraged me to do a lot of research and gave me multiple options, as well as the cost breakdowns of each.

  13. Rob Says:
    June 5th, 2007 at 3:23 pm

    Mr. Porter’s reaction is typical of someone who is in the business of charging premium prices selling a product that is quickly becoming a commodity. His arguments are the same as those made by dinosaur stock brokers that charge $150 a trade and are trying to (unsuccessfully) convince you that there is some value added to the service that Scottrade doesn’t provide for $7. All I care about when looking for a mortgage is who can provide the best terms. You should always go for the cheap unless you are actually getting something for the extra money. I didn’t take from his reply a single value-added service that mortgage borkers actually provide.

  14. mortgage-broker » Blog Archive » My Mortgage Broker Post Didn’t Sit Well With This Mortgage Broker Says:
    September 15th, 2007 at 9:22 am

    […] This time it was Don’t Get Taken Advantage of by Your Mortgage Broker. Fellow blogger and mortgage broker, David Porter, left this comment regarding that post: JLP, I know it is fun to bash the mortgage […] … …more […]

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