Big lenders vs. less well known companies

[los_west]

Are there any major differences between working with a major bank and a smaller lender?  I've always thought everything is the same...same paperwork...same hoops to jump through.  But my husband said his close friend just closed on a house, and went through a small company.  He said it was the easiest process ever.

Can it really be true?  Is this a red flag?

[newhouse2013]

After all my research prior to buying my house I was worried about going through a big bank as well and opted to go through a brokerage. The process was so easy thru out that I kept thinking there was going to be a catch but there wasn't. That was proof enough for me.

[topa]

I think this has to do mostly with the tight oversight on the larger banks and hence they probably want to book loans for prime buyers and look better from that perspective. The funny thing is that at the end of the day, these loans will probably be bundled into a tranche and end up in a large bank portfolio anyway.

Nonetheless, this is the way it works.

[juggalo9er]

while i was attempting to go through quicken i remeber waiting days for a call back......going through a local broker i recieved phone calls back within 2 hours

[TurboFX]

Does not matter where you go as long as the company is reputable. Smaller institutions tend to work faster because they have fewer loans to deal with and a larger commision incentive to close your loan. Pick a place that is knowledgeable and peofessional.

[StartingOver10]

It also has to do with the process put in place by the individual lender.

For example - most of the big box banks have moved to a model whereby the underwriter is centerally located and the LO's are just "application takers". So your file doesn't get reviewed by someone that knows and understand mortgage u/w criteria until it gets to the u/w stage. This is not all big box banks but it is true for WF and BOA. Chase is hit or miss as to the quality of the LO.  Quicken fits into this too. They have untrained phone operaters that are application takers. (Their business model is slightly different but similar.)My personal opinion is that they did this to save $$ on experienced and knowledgeable LO's. In any event, it creates issues because pre-approvals are issued but then when the file gets to u/w it is turned down because the borrower doesn't meet the criteria. In most cases it could have been picked up immediately by a knowledgeable LO, but not an untrained application taker.

The mortgage bankers and smaller lenders have on site u/w's or easy to reach u/w's and the LO's are knowledgeable. You know right away if you qualify and there are no surprises unless the borrowers information changes from application date to closing date.

[TurboFX]

Very true! A lot of the larger mortgage companies have app takers instead of LOs that understand and are knowledgable about guidelines. Some app takers don't even know what rates or programs are available. Their sole job is just to fill out an application that you can do so yourself. Even then they can't even fill out a complete and accurate application. Unfortunately this whole housing fiasco did not help to elevate the mortgage profession.  Might not be too longer before that job is outsourced too. Probably the only thing saving that job is the licenseing requirement. Find a professional that is knowledgeable to help you. 

[J_G]

If you have good credit go through big bank credit union! If you have bad credit or below 660 you will need to go through broker/originator but it will cost you more. Hope this helps