A processor’s favorite may not be the same as the loan officer’s favorite. Processors are more interested in ease, efficiency, speed and performance. The Loan Officer is often more interested in pricing/rate. The best choice would be in the blending of both.
All too often I see LOs send over a new loan that is going to a lender who is on our list of “worst” lenders. Let’s face it, there are some real stinkers out there. Because these lenders are being avoided by the public at large, what do they do? They raise the YSP being paid out to buy the market to get their numbers up. The problem with this is if they stink so bad as to have the public generally avoid them, then they get flooded with loans, how bad will their performance be now that they are inundated.
The .125% better in price you nabbed will cost .25% or more in extension fees because they cannot perform and close the loan in 30 days.
My solution which always seems to work well is that I have the LO send over the top 5 lenders with best pricing from Loan Sifter (or whomever you are pricing searching with). I always provide a “Scale of 1-10” for each lender. A processor who has decent volume with the major lenders can give you valuable feedback when deciding which lender to choose. My next post I will give you the current list of my
favorites.